[1] Amid the Great Depression, the physician Francis Townsend galvanized support behind a proposal to issue direct payments to older people.

Responding to that movement, Roosevelt organized a committee led by Secretary of Labor Frances Perkins to develop a major social welfare program proposal.

The old-age program is funded by payroll taxes, and over the ensuing decades, it contributed to a dramatic decline in poverty among older people, and spending on Social Security became a significant part of the federal budget.

Industrialization and the urbanization in the 20th century created many new social problems and transformed ideas of how society and the government should function together because of them.

Tenement houses were built quickly and poorly, cramming new migrants from farms and Southern and Eastern European immigrants into tight and unhealthy spaces.

[6] In the 1930s, the physician Francis Townsend galvanized support for his pension proposal, which called for the federal government to issue direct $200-a-month payments to the elderly.

[7] Roosevelt was attracted to the general thinking behind Townsend's plan because it would provide for those no longer capable of working, stimulate demand in the economy, and decrease the supply of labor.

[8] In 1934, the Dill-Connery bill for federal funding of state pensions programs, passed the House of Representatives and came near passage in the Senate that May.

The Wagner-Lewis bill was favored by Roosevelt, although Republicans and more conservative Democrats strongly opposed it and (as noted by one study) “was not pushed by the administration with any real vigor.

According to friends of Roosevelt’s, “his only purpose was to have the problems studied more carefully and that he believed public sentiment was not yet sufficiently crystallized in favor of such a program.”[11] In 1934, Roosevelt charged the Committee on Economic Security, chaired by Secretary of Labor Frances Perkins, with developing an old-age pension program, an unemployment insurance system, and a national health care program.

The proposal for a national health care system was dropped, but the committee developed an unemployment insurance program that would be largely administered by the states.

In January 1935, Roosevelt proposed the Social Security Act, which he presented as a more practical alternative to the Townsend Plan.

However, it was the first time that the federal government took responsibility for the economic security of the aged, the temporarily unemployed, dependent children, and the handicapped.

It grants the Surgeon General the power to distribute money to the States for that purpose with the approval of the Secretary of the Treasury.

Title VII establishes the Social Security Board and outlines that it is to be composed of three appointees chosen by the President and approved by the Senate and serving for six years.

Title IX establishes an excise tax to be paid on the first day of every year by employers proportional to the total wages of their employees.

Beginning with a set of decisions in March, April, and May 1937 (including the Social Security Act cases), the Court would sustain a series of New Deal legislation.

[27] Chief Justice Charles Evans Hughes played a leading role in defeating the court-packing by rushing these pieces of New Deal legislation through and ensuring that the court's majority would uphold it.

[28] In March 1937, Associate Justice Owen Roberts, who had previously sided with the court's four conservative justices, shocked the American public by siding with Hughes and the court's three liberal justices in striking down the court's previous decision in the 1923 case Adkins v. Children's Hospital, which held that minimum wage laws were a violation of the Fifth Amendment's due process clause and were thus unconstitutional, and upheld the constitutionality of Washington state's minimum wage law in West Coast Hotel Co. v. Parrish.

[30]: 419  Following the vast support that was demonstrated for the New Deal through Roosevelt's re-election in 1936,[30]: 422–23  Hughes persuaded Roberts to no longer base his decisions on political maneuvering and side with him in future cases that involved New Deal legislation[30]: 422–23 Records show Roberts had indicated his desire to overturn the Adkins decision two days after oral arguments concluded for the Parrish case on December 19, 1936.

During the 1950s, those over 65 continued to have the highest poverty rate of any age group in the U.S. with the largest percentage of the nation's wealth concentrated in the hands of Americans under 35.