For Progressives: A Lesson from History
In 1934, in the midst of the Great Depression, Dr. Francis Townsend conceived a plan to improve the quality of life for America’s impoverished elderly and stimulate consumer spending. His plan, known as the Townsend Plan, would create a federally funded pension program that would disburse $200 monthly to all Americans over the age of 60. Revenue generated by a new tax on all business transactions was designated to fund the plan. Recipients of the monthly disbursement would be required to spend the entire amount on consumer goods and services. Townsend’s goal was to create millions of new jobs by stimulating consumer spending, thus increasing the demand for goods and services, while encouraging older workers to retire.
The Townsend Plan had immense popular support across the nation. Pressure began to mount on both the Democratic Party congressional majority and the White House Administration to enact it and other federally initiated programs to help lift America out of the Great Depression. Whether or not these programs were economically or politically feasible was of little concern to the generally public as the unemployment rate remained above 10% while the ranks of the under-employed continued to swell. As a direct result of the rising popularity of the Townsend Plan and after months of Congressional debate the Social Security Act was passed and signed into law on August 14, 1935.
Townsend advocates were bitterly disappointed with the Social Security Act. Social Security disbursements were not scheduled to begin until 1942 and the monthly benefit amount was to be a fraction of the amount suggested by the Townsend Plan. Unemployment and pension benefits were also limited to commerce workers, excluding a large number of occupations such as railroad workers, agricultural labor, and government employees. In fact, a substantial majority of the employment definitions for qualified workers in the Social Security Act favored occupations held by white male workers, while those occupations most frequently held by women and minorities were excluded from benefits.
Seventy-five years later, America now finds itself at a similar crossroad. Bankruptcies and home foreclosures due to medical expenses are on the rise, adding to the financial struggles of the middle-class and working poor and thus magnifying the effects of the housing market crash. Progressives and Liberals have a plan to raise the quality of life for America’s un-insured and under-insured by creating a federally funded health insurance plan that would cover all Americans that could not afford private health insurance coverage and put downward pressure on the cost of medical care for all Americans. Revenue from a tax on premium private health insurance policies and a progressive tax increase on incomes above $500K/year would be used to fund the White House’s Health Care Reform Plan, which includes a Federally administered health insurance option for qualified recipients generally referred to as the Public Option. A Public Option plan has popular support across the nation and pressure is building on the Democratic Party majority in Congress and the White House Administration to enact it alongside other federal initiatives to help lift America out of our present financial recession. The political feasibility of these programs are, again, of little importance to the general public as the unemployment rate has risen to 10% nationally while the ranks of the un-insured and under-insured continue to swell due to the ever rising cost of medical care. As a direct result of the popularity of the Public Option plan and after months of debate, Congress is on the cusp of passing a Health Care Reform bill. Public Option advocates are bitterly disappointed with this bill.
There are obvious differences between the two scenarios, but the substantial similarities suggest a road-map for one potential outcome. In America today, Social Security and unemployment benefits are politically respected, protected institutions that provide a much needed lifeline for many beneficiaries. The inclusiveness and effectiveness of the Act has been greatly expanded since its initial enactment in 1935. Between 1939 to 1996 the Social Security Act was amended 17 times and, ironically, the last major amendment and expansion of the Social Security Act was signed into law in 1983 by President Ronald Reagan, a staunch conservative.
To put it succinctly, as Progressives we must begin to realize that change requires, at its very minimum, and agreed upon starting place. Radical change may be the goal but in American politics, gradualism is the norm. The Great Depression was a window of opportunity for the passing of the Social Security Act. At any other time in the 20th century it would most likely have failed. The window of opportunity for Health Care Reform is NOW, and any hesitation on our part may postpone health care reform into the far future once again.
As an intellectual exercise, consider this: Senator Joseph Lieberman (I – MA) in conjunction with conservative, pro-corporate Democrats has severely weakened the Health Care Reform currently being considered by our Democratic Party majority in Congress (with a super-majority in the Senate). If we cannot encourage radical change in a Congress controlled by a party we consider our ally, what might a Health Care Reform bill, negotiated by the GOP during a recovering economy, look like?
