In several sections of the Act, the national government created a series of financial incentives to help state governments care for the poor. This was accomplished through grants in the case of Aid to the Blind (AB), Old Age Assistance (OAA), and Aid to Dependent Children (ADC), and through a tax that could be partially offset if states created unemployment insurance. All of these programs were expected to be adopted quickly in the states and provide cash relief quickly. The American welfare state would be a truly federal endeavor, involving national and state governments. The one notable exception was old-age insurance (OAI), now called Social Security, which was created as a purely national program. The first retirement pensions would not be distributed until 1942, and represented a more long-term solution to the problem of inadequate retirement income.
Though omitted from the Act, workers’ compensation was not excluded from the deliberations leading up to the Act. FDR’s original executive order (no. 6757), issued in June 1934, gave the Committee on Economic Security wide latitude. Its overarching mission was to “study problems relating to the economic security of individuals.” The Committee narrowed the focus in August 1934, arguing that other parts of the administration were already developing proposals to promote economic recovery and prevent a repeat of the Depression. Even so, its chosen scope was broad:
The field of study to which the committee should devote its major attention is that of the protection of the individual against dependency and distress. This includes all forms of social insurance (accident insurance, health insurance, invalidity insurance, unemployment insurance, retirement annuities, survivors’ insurance, family endowment, and maternity benefits) and also problems of providing work (or opportunities for self employment) for the unemployed, and training them for jobs that are likely to become available. These several problems must be studied not only from the point of view of long time policy, but must be related to the present relief and unemployment situation (quoted in Witte 1962: 21; italics added).
At this point workers’ compensation, also known as accident insurance, was apparently still under scrutiny. In practice, however, the CES was already taking steps that effectively relegated workers’ compensation to the periphery. Why? Analysis of the secondary literature and of CES records held at the National Archives indicates no clear, simple answer. What follows, then, are several pieces of circumstantial evidence suggesting why workers’ compensation was left out. The explanation is complicated and the outcome is overdetermined which, I think, is a fair representation of these events.
Determining what happened to workers’ compensation is easier that explaining why. As is well known, the CES devoted most of its time in 1934 to questions of unemployment and old age security, and these sections of the Social Security Act were the major points of controversy in Congress in 1935. The choice of problems to address was understandable: existing work relief programs were of minimal help to the elderly; unemployment remained at record high levels from 1933 to 1934; the elderly and