The Second New Deal Chapter 13 Section 2 Angela Brown

New Deal Falters  Criticism mounted when New Deal programs failed to bring significant economic improvement  Many worried about increasing power New Deal agencies gave government  Supreme Court attacked programs

 1935 Court declared the NIRA unconstitutional because it gave the President lawmaking power and regulated local, rather than interstate commerce  1936 the court ruled that the tax funding AAA subsidies to farmers unconstitutional  Time to reassess

A Second New Deal  Despite problems – midterm elections 1934 showed overwhelming nationwide support for FDR’s administration  1935 launched Second New Deal with even bolder burst of legislation

New and Expanded Agencies  Works Progress Administration (WPA) – 1935 – lasted 8 years, work for 8 million, constructed 20,000 playgrounds, schools, hospitals, airfields, supported creative work of artists and writers  Original AAA ignored farm workers that did not own land

 1935 Resettlement Administration – loaned money to owners of small farms and helped resettle tenants and sharecroppers on productive land  1937 Farm Security Administration (FSA) – replaced resettlement administration – loaned more than $1 billion to farmers and set up camps for migrant workers

New Labor Legislation  1935 Congress passed National Labor Relations Act called Wagner Act  Legalized practices including collective bargaining and closed shops (workplaces open only to union members), outlawed spying on union members and blacklisting, set up National Labor Relations Board (NLRB) to enforce provisions  1938 Fair Labor Standards Act banned child labor and established minimum wage

Social Legislation  1935 Social Security Act established Social Security System – provided regular payments to people who could not support themselves  3 types of Insurance: 1.Old Age Pensions and Survivors’ Benefits – (workers and employers paid equally) – eligible for benefits at age 65 – farm and domestic workers not covered until 1954

2. Unemployment Insurance – funded by tax from employers with more than 8 employees – government distributed money to workers who lost jobs – states administered programs with federal guidance and financial support 3. Aid for Dependent Children, the Blind, and Physically Disabled – federal money grants

*John Maynard Keynes  These Programs were expensive.  Government paid through deficit spending.  1932 federal deficit was $461 million  1936 = $4.4 billion  British economist John Maynard Keynes argued that deficit spending was needed to end the depression.

 Keynes stated putting people to work on public projects put money into the hands of consumers who would buy more goods, stimulating the economy.  Keynes called this theory pump priming.

1936 Election  FDR won every state except Maine and Vermont (523 – 8 electoral votes)  Against Kansas Governor Alfred Landon  Showed support for New Deal although it still had many critics

The Court-Packing Scheme  1937 proposed major court reform bill  add 6 new judges to lighten the load  one for every judge over 70  really wanted to pack court with judges favorable to New Deal  Critics from all sides – would undermine separation of power – create dictatorship in U.S.

Court-Packing  Forced to withdraw bill = political damage for years to come  The court however became more favorable to FDRs ideas  Court began to uphold Second New Deal – whether due to public opinion or it being better drafted?  Some older judges retired  FDR appointed those favorable to New Deal

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