Download [73] Even the work programs of the "First New Deal

Social Security Act
A poster publicizing Social Security benefits.
Until 1935 there were just a dozen states that had old age insurance laws but these programs were
woefully underfunded and therefore almost worthless. Just one state (Wisconsin) had an insurance
program. The United States was the only modern industrial country, where people faced the
Depression without any national system of social security.[73] Even the work programs of the "First
New Deal" were just meant as immediate relief, destined to run less than a decade.[74]
The most important program of 1935, and perhaps the New Deal as a whole, was the Social
Security Act, drafted by Frances Perkins. It established a permanent system of universal retirement
pensions (Social Security), unemployment insurance, and welfare benefits for the handicapped and
needy children in families without father present.[75] It established the framework for the U.S. welfare
system. Roosevelt insisted that it should be funded by payroll taxes rather than from the general
fund; he said, "We put those payroll contributions there so as to give the contributors a legal, moral,
and political right to collect their pensions and unemployment benefits. With those taxes in there, no
damn politician can ever scrap my social security program."[76]
Compared with the social security systems in western European countries, the Social Security Act of
1935 was rather conservative. But for the first time the federal government took responsibility for the
economic security of the aged, the temporarily unemployed, dependent children and the
handicapped.
Works Progress Administration
Roosevelt nationalized unemployment relief through the Works Progress Administration (WPA),
headed by close friend Harry Hopkins. Roosevelt had insisted that the projects had to be costly in
terms of labor, long-term beneficial, and the WPA was forbidden to compete with private enterprises
(therefore the workers had to be paid smaller wages).[82] The Works Progress Administration (WPA)
was created to return the unemployed to the work force.[83] The WPA financed a variety of projects
such as hospitals, schools, and roads,[48] and employed more than 8.5 million workers who built
650,000 miles of highways and roads, 125,000 public buildings, as well as bridges, reservoirs,
irrigation systems, parks, playgrounds and so on.[84]
Prominent projects were the Lincoln Tunnel, the Triborough Bridge, the LaGuardia Airport,
the Overseas Highway and the San Francisco – Oakland Bay Bridge.[85] The Administration used coops to bring electricity to rural areas, many of which still operate.[86] The National Youth
Administration was another the semi-autonomous WPA program for youth. Its Texas
director, Lyndon Baines Johnson, later used the NYA as a model for some of his Great
Society programs in the 1960s.[87] The WPA was organized by states, but New York City had its own
branch Federal One, which created jobs for writers, musicians, artists, and theater personnel. It
became a hunting ground for conservatives searching for Communist employees.[88]
The Federal Writers' Project operated in every state, where it created a famous guide book; it also
catalogued local archives and hired many writers, including Margaret Walker, Zora Neale Hurston,
and Anzia Yezierska, to document folklore. Other writers interviewed elderly ex-slaves and recorded
their stories. Under the Federal Theater Project, headed by charismatic Hallie Flanagan, actresses
and actors, technicians, writers, and directors put on stage productions. The tickets were
inexpensive or sometimes free, making theater available to audiences unaccustomed to attending
plays.[87] One Federal Art Project paid 162 trained woman artists on relief to paint murals or create
statues for newly built post offices and courthouses. Many of these works of art can still be seen in
public buildings around the country, along with murals sponsored by the Treasury Relief Art Project
of the Treasury Department.[89][90] During its existence, the Federal Theatre Project provided jobs for
circus people, musicians, actors, artists, and playwrights, together with increasing public
appreciation of the arts.[48]
Civilian Conservation Corps
The Civilian Conservation Corps (CCC) was a public work relief program that operated from 1933
to 1942 in the United States for unemployed, unmarried men from relief families as part of the New
Deal. Originally for young men ages 18–23, it was eventually expanded to young men ages 17–
28.[1] Robert Fechner was the head of the agency. It was a major part of President Franklin D.
Roosevelt's New Deal that provided unskilled manual labor jobs related to the conservation and
development of natural resources in rural lands owned by federal, state and local governments. The
CCC was designed to provide jobs for young men, to relieve families who had difficulty finding jobs
during the Great Depression in the United States while at the same time implementing a general
natural resource conservation program in every state and territory. Maximum enrollment at any one
time was 300,000; in nine years 3 million young men participated in the CCC, which provided them
with shelter, clothing, and food, together with a small wage of $30 a month ($25 of which had to be
sent home to their families).[2]
The American public made the CCC the most popular of all the New Deal programs.[3] Principal
benefits of an individual's enrollment in the CCC included improved physical condition, heightened
morale, and increased employability.[4] Implicitly, the CCC also led to a greater public awareness and
appreciation of the outdoors and the nation's natural resources; and the continued need for a
carefully planned, comprehensive national program for the protection and development of natural
resources.[5]
During the time of the CCC, enrollees planted nearly 3 billion trees to help reforest America,
constructed more than 800 parks nationwide and upgraded most state parks, updated forest fire
fighting methods, and built a network of service buildings and public roadways in remote areas.
The CCC operated separate programs for veterans and Native Americans.
Despite its popular support, the CCC was never a permanent agency. It depended on emergency
and temporary Congressional legislation for its existence. By 1942, with World War II and the draft in
operation, need for work relief declined and Congress voted to close the program.[8]
Federal Housing Administration
During the Great Depression many banks failed, causing a drastic decrease in home loans and
ownership. At this time, most home mortgages were short-term (three to five years), with
no amortization, and balloon instruments at loan-to-value (LTV) ratios below sixty percent.[1] The
banking crisis of the 1930s forced all lenders to retrieve due mortgages; refinancing was not
available, and many borrowers, now unemployed, were unable to make mortgage payments.
Consequently, many homes were foreclosed, causing the housing market to plummet. Banks
collected the loan collateral (foreclosed homes) but the low property values resulted in a relative lack
of assets.
In 1934 the federal banking system was restructured. The National Housing Act of 1934 created the
Federal Housing Administration. Its intent was to regulate the rate of interest and the terms of
mortgages that it insured. These new lending practices increased the number of people who could
afford a down payment on a house and monthly debt service payments on a mortgage, thereby also
increasing the size of the market for single-family homes.[2]
The FHA calculated appraisal value based on eight criteria and directed its agents to lend more for
higher appraised projects, up to a maximum cap. The two most important were "Relative Economic
Stability", which constituted 40% of appraisal value, and "protection from adverse influences", which
made up another 20%.
In 1935, Colonial Village in Arlington, Virginia, was the first large-scale, rental housing project
erected in the United States that was Federal Housing Administration-insured.[3] During World War II,
the FHA financed a number of worker's housing projects including the Kensington Gardens
Apartment Complex in Buffalo, New York.[4]
In 1965 the Federal Housing Administration became part of the Department of Housing and Urban
Development (HUD).
Following the subprime mortgage crisis, FHA, along with Fannie Mae and Freddie Mac, became a
large source of mortgage financing in the United States. The share of home purchases financed with
FHA mortgages went from 2 percent to over one-third of mortgages in the United States, as
conventional mortgage lending dried up in the credit crunch. Without the subprime market, many of
the riskiest borrowers ended up borrowing from the Federal Housing Administration, and the FHA
could suffer substantial losses. Joshua Zumbrun and Maurna Desmond of Forbes have written that
eventual government losses from the FHA could reach $100 billion.[5][6]
The troubled loans are now weighing on the agency’s capital reserve fund, which by early 2012 had
fallen below its congressionally mandated minimum of 2%, in contrast to more than 6% two years
earlier.[7] By November 2012, the FHA was essentially bankrupt.[8][9][10]
Civil Works Administration
The Civil Works Administration (CWA) was a short-lived U.S. job creation program established by
the New Deal during the Great Depression to rapidly create manual labor jobs for millions of
unemployed workers. The jobs were merely temporary, for the duration of the hard winter of 1933–
34. President Franklin D. Roosevelt unveiled the CWA on November 8, 1933 and put Harry L.
Hopkins in charge of the short-term agency.
The CWA was a project created under the Federal Emergency Relief Administration (FERA). The
CWA created construction jobs, mainly improving or constructing buildings and bridges. It ended on
March 31, 1934, after spending $200 million a month and giving jobs to 4 million people.
"6,000 Men and a Scenic Boulevard"; San Francisco, California, ca. 1934
The CWA's workers laid 12 million feet of sewer pipe and built or improved 255,000 miles of roads,
40,000 schools, 3,700playgrounds, and nearly 1,000 airports (not to mention building
250,000 outhouses still badly needed in rural America).[1] The program was praised by Alf Landon,
who later ran against Roosevelt in the 1936 election.[1]
Representative of the work are one county's accomplishments in less than five months, from
November 1933 to March 1934.Grand Forks County, North Dakota put 2,392 unemployed workers
on its payroll at a cost of about $250,000. When the CWA began in eastern Connecticut, it could hire
only 480 workers out of 1,500 who registered for jobs. Projects undertaken included work on
city utility systems, public buildings, parks, and roads. Rural areas profited, with most labor being
directed to roads and community schools. CWA officials gave preference to veterans with
dependents, but considerable political favoritism determined which North Dakotans got jobs.
Although the CWA provided much employment, there were many taxpayers who saw leaves being
raked but nothing of permanent value. Roosevelt told his cabinet that this criticism moved him to end
the program and replace it with the WPA which would have long-term value for the society, in
addition to short-term benefits for the unemployed.