The centerpiece of the Second New Deal was the Social Security Act of 1935. It embodied Roosevelt’s conviction that the national government had a responsibility to ensure the material well-being of ordinary Americans. It created a system of unemployment insurance, old age pensions, and aid to the disabled, the elderly poor, and families with dependent children.
None of these were original ideas. The Progressive platform of 1912 had called for old age pensions. Assistance to poor families with dependent children descended from the mothers’ pensions promoted by maternalist reformers. Many European countries had already adopted national unemployment insurance plans. What was new, however, was that in the name of economic security, the American government would now supervise not simply temporary relief but a permanent system of social insurance.
The Social Security Act launched the American version of the welfare state—a term that originated in Britain during World War II to refer to a system of income assistance, health coverage, and social services for all citizens. The act illustrated both the extent and the limits of the changes ushered in by the Second New Deal. The American welfare state marked a radical departure from previous government policies, but compared with similar programs in Europe, it has always been far more decentralized, involved lower levels of public spending, and covered fewer citizens. The original Social Security bill, for example, envisioned a national system of health insurance. But Congress dropped this after ferocious opposition from the American Medical Association, which feared government regulation of doctors’ activities and incomes.