Overall, President Roosevelt’s New Deal had served the country well. Although far from perfect, its programs and policies were beginning to rebuild the economy through increased federal intervention in, and regulation of, regional and local affairs. More important, the New Deal helped ease the burdens of hundreds of thousands of Americans who were suffering from poverty and despair. It restored hope among the people that the American dream had not, in fact, become unraveled.
But Americans have always been on the lookout for something new, something better. Toward the end of the 1930s, FDR’s popularity began to wane, as did public support for his New Deal programs.
"Court-Packing:" A Bold Move by Roosevelt
During his first term of office, from 1932-36, it appeared that Roosevelt could do no wrong. The majority of Americans had confidence in his approach, and the Democratic majorities in both houses of Congress helped the new president get his New Deal programs enacted.
But during his second term, some of the population became disillusioned. Even though Roosevelt and his administration were attempting to solve some very complex economic and social problems, people wanted to see more dramatic results. In 1937, Roosevelt deepened this disillusionment with what became known as his "court-packing" plan. Saying that the workloads of U.S. Supreme Court justices were too heavy, he proposed reforming the Court by adding a new justice for each one who did not retire at age seventy. This meant as many as six new positions could be added. Upon the death or retirement of a justice, no new justice would be appointed, so eventually the Court would revert to its original size.
Why did Roosevelt make this bold proposal? Roosevelt was angry because in 1935 and 1936, the Court had declared the National Recovery Act and the Agricultural Adjustment Administration unconstitutional. Some observers said he was afraid that the four conservative justices would also rule against some of his most important proposals. Cases soon to come before the Court included those relating to the Wagner Act, the Social Security Act, and legislation that regulated workers’ hours and wages. Others felt that Roosevelt was simply power hungry. They feared that if his proposal to pack the court was approved, it would set a dangerous precedent by tinkering with the U.S. Constitution and the federal government’s balance of powers.
Roosevelt’s proposal was more controversial than anything he had previously suggested during his presidency, and it set off a national debate about the power of the presidency. In 1937, he backed off when one of the Court’s conservative judges surprised everyone by supporting most of the administration’s reforms. But the whole incident undermined Roosevelt’s reputation with the public and with Congress, and people became wary of his leadership.
The Decline of the New Deal
In addition to trying to alter the composition of the Supreme Court, Roosevelt also tried to put in place some administrative reforms. In 1936, he appointed a committee to study the way the federal programs were being administered, with the hope of making some of the New Deal programs permanent.
When the committee report was issued in 1937, the public and Congress again reacted negatively. Critics accused Roosevelt of trying to turn the country into a welfare state. Congress refused to make most of the changes proposed in the report, which meant another defeat for Roosevelt. Although it was Congress that voted the proposals down, the lawmakers were reflecting the changing mood of the American people. Most opinion polls conducted between 1937 and 1939 indicated that around two-thirds to three-quarters of Americans wanted Roosevelt to take a more conservative approach.
Also in 1937, Roosevelt took steps that further undermined his credibility with the American people. In an attempt to balance the budget by trimming the federal deficit, he ordered cutbacks in several government programs, most notably work relief. At the same time, employers and employees were forced to pay social security taxes for the second year since the enactment of the Social Security Act. The result was a mini-stock market crash, as investors sold off some seventeen million shares. The consequences were a decrease in the production of durable goods (50 percent), increased unemployment (23 percent in manufacturing, for example), and a decline in the national income (13 percent). Work relief rolls swelled instead of decreasing, and growing numbers of Americans again sought nourishment at soup kitchens and in breadlines. People derisively liked to call the recession of 1938 "Roosevelt’s recession."
Roosevelt’s power became further eroded as the Democratic party splintered into factions. Different wings of the party began to disagree strenuously over such issues as housing, wages and hours, and civil rights. Various factions — rural and urban, northern and southern — that had formerly pulled together to support Roosevelt and the New Deal now began pressing for their own interests.
Perhaps the New Deal would have lost its appeal anyway. But Roosevelt’s seemingly high-handed actions sped up the process. At a time when Americans were frightened of the dictators emerging in Europe, the possible misuse of authority at home was especially alarming.
By 1939, lawmakers had voted for a number of laws that virtually killed the New Deal. Congress stopped funding for the Federal Theater Project, primarily because it was producing radical plays, and it repealed a tax on undistributed profits, which delighted business owners. It refused to increase public housing funding, and it passed the Hatch Acts, two laws that forbade almost all government employees from participating in political campaigns. This was intended to prevent any employees of New Deal relief agencies, such as the WPA, from organizing to get out the vote for Roosevelt in the upcoming election. In response, Roosevelt backed off from his efforts to increase federal welfare spending for health and social services.
