A second major burst of New Deal legislation, concerned especially with social reform, came in 1935. The defining programs of this Second New Deal began with the Emergency Relief Appropriation Act of April 1935, which produced the Works Progress Administration (WPA), followed in the spring and summer by a number of programs enacted in the "Second Hundred Days." These included the Social Security Act, the National Labor Relations Act (or Wagner Act), the Revenue Act (or "Wealth Tax") of 1935, the Banking Act of 1935, and the Public Utilities Holding Company Act.
But while some people have generally agreed that the two major periods of New Deal reform came in 1933 and 1935, they have disagreed about other aspects of the First and Second New Deals. One view maintains that the New Deal moved in a more radical policy direction in 1935, with its emphasis on social-democratic programs to provide economic security, to support organized labor, and to implement more progressive taxation. Another version holds that while the New Deal became politically more radical in 1935, with anti-business rhetoric and appeals to the working class, it actually became more conservative ideologically and programmatically by moving away from federal planning and controls and towards regulatory efforts to ensure a more competitive market economy.
The First and Second New Deal framework seems to oversimplify and therefore to distort the nature and development of the New Deal. Policymaking was more complicated and had more continuity than the model suggests, and changing circumstances rather than ideological change largely accounted for the differences between the First and the Second New Deals. Yet the framework nonetheless remains a useful one that identifies the two principal, and different, periods of New Deal policymaking. The Second New Deal had a greater social-democratic character, with programs that aimed especially at economic security and at the working classes. In addition to the Wagner Act that enabled the growth in size and power of organized labor, the Social Security Act, with its old-age insurance, unemployment compensation, and public assistance provisions, constituted a major change laying essential foundations of the modern regulatory-welfare state.
To be sure, the programs of the Second New Deal did not do all that many claimed that they did or desired that they do. The Social Security Act, for example, did not cover large groups of people, agricultural and domestic workers most importantly. Surviving spouses initially had no benefits, and African Americans often held jobs not covered by the act.
Benefits were relatively small, and the old-age and unemployment insurance were financed largely by regressive payroll taxes. The act did not include health insurance. In the reworking of social reform policy in 1935, "unemployables" (including such groups as children, the elderly, and the blind) fell to state responsibility, though the Social Security Act provided for matching grants for such categories of the needy. Other Second New Deal programs also had important limits. The "Wealth Tax" turned out to be something of a misnomer, for after Congress revised it, the legislation had little redistributionist character and did little to reduce concentrations of corporate wealth and power. The Public Utilities Holding Company Act also underwent significant revision, though ultimately it did help to decentralize the utilities industry and end some of the worst monopolistic practices.
