The ‘Second New Deal’ If Roosevelt's First New Deal (1933-1935) concentrated on economic relief, dealing with the immediate issue of getting unemployed Americans back to work, then the Second New Deal (19351937) focused on recovery and long-term reform issues. This Second New Deal came about, in part, because of the social concerns of the President and his First Lady, Eleanor Roosevelt, but also because of mounting criticism--from the political left and the political right--of the policies of the First New Deal. Beginning in 1935, Roosevelt began sending to Congress a host of new legislative initiatives: “The Second New Deal.” The programs that came out of the Second New Deal included: • WPA, which stood for Works Progress (later "Projects") Administration. The WPA promoted both economic relief and reform. Required to choose projects that would not compete with private business, the WPA paved streets and highways; built bridges, airfields, and post offices; restored forests, and extended electrical power to rural areas. Over its seven-year history, the WPA employed about 8.5 million Americans. • The Wagner Act, known officially as the National Labor Relations Act, preserved and strengthened Section 7A of the NIRA. It guaranteed workers the right to unionize and the right to bargain collectively with management. For the first time, the federal government recognized and protected labor unions. • The Social Security Act created a cooperative federal-state system to provide unemployment compensation, old-age insurance and aid to families with dependent children. Workers who paid Social Security taxes out of their wages would receive benefits upon retirement at age 65. Employee and employer contributions would cover the costs of these benefits. • On the one hand, Social Security seemed a fairly radical piece of reform legislation, since the government committed itself to provide help for the elderly. In reality, however, it was a fairly conservative program, since workers and their employers, and not the government, were footing the bill. Still, the act was a milestone in American history because it acknowledged the responsibility of society at large to take care of the less fortunate. • The Wealth Tax Act increased taxes on the wealthy and created new and larger taxes on excess business profits, inheritances, large gifts, and profits from the sale of property. The act also put new restrictions on trusts and holding companies. Business leaders were highly critical of this Second New Deal and many viewed Roosevelt as a traitor to his class and a socialist who was out to strip them of their wealth. Although many members of Congress were far to the left of FDR, he seemed to personify the new anti-business position in America. Nonetheless, FDR's relief and reform efforts actually preserved capitalism. The AAA, the NIRA, new banking legislation, and regulations of securities on Wall Street ultimately helped big business. The Roosevelt Recession • Having won the 1936 presidential election by the biggest margin up to that time, it seemed that everything was going well for Roosevelt and the New Deal. • In 1937, the president, in fact, believed that the nation had recovered its economic health and he tried to balance the federal budget by cutting back on New Deal programs. • Such policies, however, proved disastrous for the American economy. As a result of such cuts, unemployment rose by 1.5 million by July 1937. With farm subsidies cut, farm prices also fell, and by August an additional 4 million Americans were out of work. The economy would not recover fully from the Roosevelt Recession until the United States entered World War II. Lasting Impacts of the New Deal: From Main Street to Pennsylvania Avenue • The New Deal was not a revolution; it did not bring about radical change. Nor did it end the Great Depression. It did, however, transform American society and alter the relationship between government and business. • For one thing, the New Deal redirected the eyes of the American public from Main Street, city council chambers, and state capitol buildings towards Washington, D. C. For the first time, many Americans expected the federal government to play a vital role in the nation's social welfare. • In another significant development, the Wagner Act made organized labor much more powerful. Public policy became a struggle between big business and organized labor for control of/influence on “big government.” This relationship continues to have a major impact on public policy today.