The Second New Deal

What Was the Second New Deal About? The First New Deal was about relief, recovery, and reform By early 1935, FDR launched an aggressive campaign to find solutions to the lingering problems of the depression The Second New Deal addressed issues of the elderly, the poor, and the unemployed He faced little challenge in progressing the First Deal deal but not the second

The Works Progress Administration (WPA) Appropriated $5 billion to create new jobs Employed more than 8 million people Spent more than $5 billion by 1943 ($11 billion) Based on Keynes theory of deficit spending Social Security Act One of the few industrialized nations that did not have a form of pension system for the elderly Insurance: unemployment insurance, victims of work related accidents, disabled Did not benefit everyone Proved the most popular New Deal program

Rural Electrification Administration (REA) ~ 10% of farmers had electricity pre-depression Gave loans to electric utilities to build power lines in rural areas By 1950 around 80% of farms had electricity Did not benefit small farms Farm prices stabilized and agriculture remained a productive sector of the economy Public works water projects helped develop the American West Central Valley irrigation system in California Bonneville Dam in Pacific Northwest

How Did the New Deal Help Labor? During the Great Depression there was an spike in union activity  mining to auto industry FDR believed that the success of the New Deal hinged on raising the standard of living for American industrial workers By doing so FDR believed the economy would grow

The National Labor Relations Act (Wagner Act) Recognized the right of employees to join labor unions Gave workers right to collective bargaining  had to negotiate with unions about hours, wages, and other working conditions Created the National Labor Relations Board (NLRB)  looked into workers’ complaints The Fair Labor Standards Act Established a minimum wage (25 cent/hour) Maximum workweek of 44 hours Outlawed child labor

Congress of Industrial Organizations (CIO) Created after AFL would not organize workers from the major industries Established by John J. Lewis and other labor leaders Targeted lower paid and more ethnically diverse workers and helped create more unions The United Automobile Workers Union (UAW) staged a sit-in strike at a General Motors plant Led to more union successes By 1940, 9 million workers belonged to unions

What Challenges did the New Deal Face? FDR won the 1936 presidential election in a landslide  won every state except ME & VT Determined to challenge the conservative Supreme Court during his 2nd term Schecter v US ruled that POTUS has no pwer to regulate interstate commerce  NIRA was unconstitutional Expected SCOTUS to strike down other New Deal measures

In 1937 FDR approached Congress in a special address about adding up to 6 new Justices on to SCOTUS bench Would dilute the power of the sitting justices This plan became known as court packing Did not have to because SCOTUS turned towards the New Deal Was able to replace retired Justices of the Supreme Court with New Deal friendly justices

FDR cut back federal spending during 1935- 1936 because the economy was improving Miscalculated and the Federal Reserve Board raised interest rates making it hard for businesses to expand and people to obtain loans Economy took a nosedive as unemployment rose past 20% FDR lost backing in the 1938 congressional elections  did not pursue for reforms due to importance foreign policy