Roosevelt’s first term had seen an extraordinary expansion of the federal state. The great burst of government action between 1933 and 1935 was unequaled in the nation’s history (though Congress and President Lyndon Johnson nearly matched it in 1965-1966; see “Lyndon B. Johnson and the Great Society” in Chapter 28). Roosevelt’s second term, however, was characterized by a series of political entanglements and economic bad news that stifled further reform.

The 1936 Election FDR was never enthusiastic about public relief programs. But with the election of 1936 on the horizon and 10 million Americans still out of work, he won funding for the Works Progress Administration (WPA). Under the energetic direction of Harry Hopkins, the WPA employed 8.5 million Americans between 1935, when it was established, and 1943. The agency’s workers constructed or repaired 651,087 miles of road, 124,087 bridges, 125,110 public buildings, 8,192 parks, and 853 airports. But although the WPA was an extravagant operation by 1930s standards, it reached only about one-third of the nation’s unemployed.

As the 1936 election approached, new voters joined the Democratic Party. Many had personally benefitted from New Deal programs such as the WPA or knew people who had (Table 23.2). One was Jack Reagan, a down-on-his-luck shoe salesman (and the father of future president Ronald Reagan), who took a job as a federal relief administrator in Dixon, Illinois, and became a strong supporter of the New Deal. In addition to voters such as Reagan, Roosevelt could count on a powerful coalition of organized labor, midwestern farmers, white ethnic groups, northern African Americans, and middle-class families concerned about unemployment and old-age security. He also commanded the support of intellectuals and progressive Republicans. With difficulty, the Democrats held on to the votes of their white southern constituency as well.

Republicans recognized that the New Deal was too popular to oppose directly, so they chose as their candidate the progressive governor of Kansas, Alfred M. Landon. Landon accepted the legitimacy of many New Deal programs but criticized their inefficiency and expense. He also pointed to authoritarian regimes in Italy and Germany and hinted that FDR harbored similar dictatorial ambitions. These charges fell on deaf ears. Roosevelt’s victory in 1936 was one of the most lopsided in American history. The assassination of Huey Long by a Louisiana political rival in September 1935 had eliminated the threat of a serious third-party challenge. Roosevelt received 60 percent of the popular vote and carried every state except Maine and Vermont. Organized labor, in particular, mobilized on behalf of FDR, donating money, canvassing door to door, and registering hundreds of thousands of new voters. The New Republic, a liberal publication, boasted that “it was the greatest revolution in our political history.”

“I see one-third of a nation ill-housed, ill-clad, ill-nourished,” the president declared in his second inaugural address in January 1937. But any hopes that FDR had for expanding the liberal welfare state were quickly dashed. Within a year, staunch opposition to Roosevelt’s initiatives arose in Congress, and a sharp recession undermined confidence in his economic leadership.

Court Battle and Economic Recession Roosevelt’s first setback in 1937 came when he surprised the nation by asking for fundamental changes to the Supreme Court. In 1935, the Court had struck down a series of New Deal measures by the narrow margin of 5 to 4. With the Wagner Act, the Tennessee Valley Authority, and Social Security all slated to come before the Court, the future of the New Deal rested in the hands of a few elderly, conservative-minded judges. To diminish their influence, the president proposed adding a new justice to the Court for every member over the age of seventy, a scheme that would have brought six new judges to the bench at the time the legislation was proposed. Roosevelt’s opponents protested that he was trying to “pack” the Court. After a bitter, months-long debate, Congress rejected this blatant attempt to alter the judiciary to the president’s advantage.

If Roosevelt lost the battle, he went on to win the war. Swayed in part by the president’s overwhelming electoral victory in the 1936 election, the Court upheld the Wagner and Social Security Acts. Moreover, a series of timely resignations allowed Roosevelt to reshape the Supreme Court after all. His new appointees — who included the liberal-leaning and generally pro–New Deal Hugo Black, Felix Frankfurter, and William O. Douglas — viewed the Constitution as a “living document” that had to be interpreted in the light of present conditions.

The so-called Roosevelt recession of 1937–1938 dealt another blow to the president. From 1933 to 1937, gross domestic product had grown at a yearly rate of about 10 percent, bringing industrial output back to 1929 levels. Unemployment had declined from 25 percent to 14 percent. “The emergency has passed,” declared Senator James F. Byrnes of South Carolina. Acting on this assumption, Roosevelt slashed the federal budget. Following the president’s lead, Congress cut the WPA’s funding in half, causing layoffs of about 1.5 million workers, and the Federal Reserve, fearing inflation, raised interest rates. These measures halted recovery. The stock market responded by dropping sharply, and unemployment jumped to 19 percent. Quickly reversing course, Roosevelt began once again to spend his way out of the recession by boosting funding for the WPA and resuming public works projects.

Although improvised, this spending program accorded with the theories of John Maynard Keynes, a visionary British economist. Keynes transformed economic thinking in capitalist societies in the 1920s by arguing that government intervention could smooth out the highs and lows of the business cycle through deficit spending and the manipulation of interest rates, which determined the money supply. This view was sharply criticized by Republicans and conservative Democrats in the 1930s, who disliked government intervention in the economy. But Keynesian economics gradually won wider acceptance as World War II defense spending finally ended the Great Depression.

A reformer rather than a revolutionary, Roosevelt had preserved capitalism and liberal individualism — even as he transformed them in significant ways. At the same time, conservatives had reclaimed a measure of power in Congress, and those who believed the New Deal had created an intrusive federal bureaucracy kept reform in check after 1937. Throughout Roosevelt’s second term, a conservative coalition of southern Democrats, rural Republicans, and industrial interests in both parties worked to block or impede social legislation. By 1939, the era of change was over.