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FDR's 'Forgotten Man' at Risk

By attacking Social Security, the 'Bush Deal' aims to finish off the New Deal.

February 18, 2005|Jonathan Alter | Jonathan Alter, a political columnist for Newsweek, is at work on a book about FDR and the Great Depression.

President Bush's overhaul of Social Security isn't going well right now, but it's important to remember that he is playing a long game that is less attuned to daily or weekly news cycles than to what he hopes are the cycles of history. At issue is nothing less than the repeal of the whole idea behind the New Deal.

Peter Wehner, a key White House strategist, put it this way in a recent memo: "For the first time in six decades, the Social Security battle is one we can win -- and in doing so, we can help transform the political and philosophical landscape of the country."

The White House wasn't happy this leaked; it is claiming publicly, with Orwellian logic, that Bush wants simply to update the New Deal. But the debate's history says otherwise.

The New Deal entered the language during New York Gov. Franklin D. Roosevelt's speech accepting the Democratic nomination for president in 1932. It was originally just a catch-all phrase for his vaguely liberal platform but soon took on a distinct ideological meaning.

That year, even many Democrats were appalled at the idea of FDR embracing what he called "the forgotten man."

The progressive Al Smith, for instance, anticipated GOP arguments of later years by accusing FDR of fostering class warfare. President Hoover, a Republican, was in many ways a progressive by today's standards -- he had grown famous organizing relief efforts during World War I and favored raising taxes to balance the budget. But he was appalled at the idea of the federal government guaranteeing anyone, even old people, a decent standard of living. That was the job of business and voluntary associations. Americans, he felt, should be captains of their own fate.

The animating idea of the New Deal was something quite different -- a new social contract under which we all owed each other something.

Much of the New Deal was dedicated to increasing taxes, then using the money to prevent farm and home foreclosures and to help people back into the middle class with low-interest loans. Its centerpiece, Social Security, was about making sure the elderly felt in the autumn of their lives that they owned a bit of the American dream too. In a way, it was Roosevelt who invented the "ownership society." Tax revenues weren't "your money" but "our money" -- an instrument for righting some moral wrongs, such as octogenarians having to dig ditches to eat.

Nowadays this sounds like a hopelessly old-fashioned Clifford Odets play. But Social Security was so popular from the moment it was enacted in 1935 that it cowed Republicans into me-tooism. The next five Republican nominees for president -- Alf Landon, Wendell Willkie, Thomas Dewey, Dwight Eisenhower, Richard Nixon -- were all moderates who accepted the premise of the New Deal, though they pushed for a more business-friendly government.

But even as GOP platforms endorsed Social Security, the ascendant conservative wing of the party, from Robert Taft to Barry Goldwater to Ronald Reagan, considered it and much of the New Deal a threat to the free enterprise system. The attacks on what newspaper publisher William Randolph Hearst called the "Raw Deal" became all the more venomous as Republicans grew frustrated by the staying power of FDR's legacy. This curdled into the bitterness of the McCarthy era. Anti-communism worked for the GOP in part because it dovetailed with the party's critique of the New Deal as being socialist or even communist at its core.

But after his death, FDR was too popular to attack frontally. A conservative urban legend was born that lives even now -- most recently peddled by Fox News' Brit Hume -- that Roosevelt actually wanted to convert Social Security to private accounts after 30 years. (It's completely untrue, though he did favor supplemental voluntary retirement insurance above and beyond standard Social Security).

Although constituents loved Social Security, conservative politicians did not. Within their own ranks, they seethed. Lou Cannon, Reagan's biographer, wrote that Reagan "shared the view that Social Security was a Ponzi scheme."

After Goldwater was crushed in 1964 and Reagan lost the 1976 primaries to Gerald Ford, in part because both wanted to make Social Security voluntary, the issue became the "third rail of American politics." Touch it and you die. As president, Reagan was slam-dunked when he tried to cut benefits, and he later gave in and strengthened the program. Only now do we have a president who is willing to go at the underpinnings of the New Deal consensus.

Bush cannot do so directly. FDR's handiwork is still so revered that the president must cast his proposal in the guise of saving Social Security. But Bush's idea is nearly 180 degrees from Roosevelt's.

The New Deal was about ensuring against risk, making disadvantaged people feel more secure in the knowledge that the government would help them stand against the vicissitudes of fate. The Bush Deal is about expanding risk, making disadvantaged people feel more acutely than at any time since the 1920s that they are at sea amid unpredictable market forces, fending for themselves.

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