“Maybe We Need an Economic Planning Agency”: The Rise and Fall and Rise of National Planning

When Franklin D. Roosevelt entered the White House in 1933, at the height of the worst economic crisis in U.S. history, enthusiasm for planning-based policy solutions was running high. Across the political spectrum, Democrats, Republicans, economists, business magnates, and labor leaders were calling for greater interventions into the economy by the federal government in response to the Great Depression. Roosevelt was, according to Otis Graham, “an instinctive collectivist” and, although his understanding of planning was shallow, the idea ran through much of the New Deal.^{Footnote 14} However, planning as an instrument of policy remained haphazard and inconsistent. Interest in more comprehensive social and economic planning would grow during the 1930s and would reach a peak of intensity during World War II, when the federal government was compelled to marshal the nation’s resources to meet a new national emergency. By 1945, most policymakers accepted that a version of Keynesianism should be the basis of postwar economic management, using government intervention into the business cycle to ensure growth and avert catastrophe.^{Footnote 15} Others sought to move beyond that, and argued that the federal government should retain the planning tools it had used to fight the war as the nation reconverted to a peacetime economy.^{Footnote 16} Economists like Alvin Hansen encouraged planning for a full employment economy after the war, as an answer to widespread fears that demobilization would lead to the return of joblessness.^{Footnote 17}

The ambitions of liberal policymakers dovetailed with the aims of a civil rights movement that had been growing in strength throughout the war years. More than one million African Americans served in the armed forces and major civil rights organizations sought to leverage that service in the ongoing freedom struggle. The issue of employment was central to the struggle and activists were determined that African Americans should not be overlooked in either mobilization or demobilization.^{Footnote 18} In 1941, labor organizer and civil rights leader A. Philip Randolph announced that he would be bringing one hundred thousand African Americans together in a March on Washington for “Jobs and Freedom.” To forestall that march, FDR issued an executive order that outlawed discrimination in the defense industry and established the Fair Employment Practice Committee (FEPC) to enforce it.^{Footnote 19} As the war drew to a close, activists pushed the cause of full employment, and a planned economy, alongside antidiscrimination measures. “Whether there is to be unemployment or full employment even after the armistice,” wrote the Pittsburgh Courier in 1944, “depends upon the intelligence and over-all scope of planning now.”^{Footnote 20}

These efforts coalesced into the campaign to pass a full employment act under Roosevelt’s successor, Harry Truman. However, hopes for a robust bill ended in bitter disappointment with the passage of the anemic Employment Act in 1946.^{Footnote 21} Despite intensive lobbying from a liberal-labor coalition, and Truman’s full-throated support, conservative opponents in Congress stripped out the bill’s enforcement mechanisms and left only a vague injunction for the federal government to “promote maximum employment, production, and purchasing power.” The postwar economic boom smothered fears that demobilization would see a return to mass unemployment and rendered the act’s weakness moot.^{Footnote 22} Nonetheless, the act had an enduring institutional legacy, creating two new bodies to oversee national economic policy: the Council of Economic Advisers (CEA), to advise the president, and the Joint Economic Committee (JEC), to coordinate congressional economic policymaking.^{Footnote 23} Though significant, these developments fell far short of the ambitions of the bill’s drafters.^{Footnote 24}

National planning ideas enjoyed a sudden revival in the 1970s as the United States found itself mired in the worst economic downturn since the Depression. Touched off by two major jolts—Nixon’s decision to bring the United States off the gold standard in 1971 and the “oil shock” of 1973—America entered a period of protracted economic malaise, characterized by a stagnating economy, rising unemployment, and high inflation, known collectively as “stagflation.” According to the Keynesian theories that had governed economic management since the 1940s, this particular combination was impossible; high unemployment was supposed to smother inflation and vice versa.^{Footnote 25} In response, an increasing number of intellectuals and policymakers concluded that a shift toward a planned economy was the way out of the crisis. Even the chair of Nixon’s CEA, Herbert Stein, told the 1973 meeting of the American Economic Association, “Maybe we need an economic planning agency.”^{Footnote 26} The foremost academic champion of national planning was the Harvard economist and Nobel laureate Wassily Leontief, who began calling for “a well-staffed, well-informed and intelligently guided” national planning board.^{Footnote 27} In February 1975, Leontief joined with Leonard Woodcock, the president of the United Auto Workers (UAW), to launch the Initiative Committee for National Economic Planning. The committee unveiled a proposal for legislation to create an Office of Economic Planning in the White House and a congressional Joint Planning Committee, sponsored by seventy businessmen, academics, and labor leaders.^{Footnote 28}

That legislation—the Balanced Growth and Economic Planning Act—was introduced in May 1975 by senators Jacob Javits of New York, a liberal Republican, and Hubert Humphrey of Minnesota.^{Footnote 29} Humphrey, a former vice president and presidential candidate, had a longtime interest in planning that had crystallized during the early 1970s. Humphrey’s political consciousness had been forged by the New Deal, which he saw as a lifeline for families like his. “Why am I what I am on economics?” he told a reporter in 1977. “I saw the Depression take ten years out of my father’s life. . . . I have seen people who have just worked their hearts out and couldn’t make it.”^{Footnote 30} As a graduate student at Louisiana State University in 1939–40, he wrote his master’s thesis on the political philosophy that underpinned the New Deal. Humphrey understood the New Deal as a nonrevolutionary program, “thoroughly saturated with American ideals,” which sought to save capitalism from itself and “to provide economic security without sacrificing political liberty.” Its most significant innovation, he wrote, was “the acceptance by the state of the responsibility for keeping the economic machinery in operation.”^{Footnote 31}

As a senator in the 1950s and 1960s, Humphrey built a record as a reliable liberal and a fervent supporter of activist government. Many of the causes he championed would later form the basis of the New Frontier and Great Society, among them civil rights, the Peace Corps, and Medicare.^{Footnote 32} In 1964, Lyndon B. Johnson made him vice-presidential nominee on the Democratic ticket. However, Humphrey’s exclusion from serious policymaking as vice president, combined with his willingness to support LBJ’s most controversial policies, particularly the Vietnam War, badly damaged his reputation.^{Footnote 33} When he ran unsuccessfully for president in his own right in 1968, after Johnson declined to pursue renomination, he did so as the standard bearer of the Democratic establishment against the insurgent New Politics candidacies of Eugene McCarthy and Robert Kennedy.^{Footnote 34}

The agonies of post-1960s liberalism did little to dent Humphrey’s faith in big government, which was confirmed in his bid to return to the Senate in 1970. In announcing his candidacy, he castigated “the tragedy of government default on economic leadership,” which had revived “something I had hoped never to see again—the fear of loss of jobs.”^{Footnote 35} Humphrey won that election easily but, as congressional seniority was dependent on continuous service, was subjected to the indignity of freshman status, denied a coveted appointment to the Foreign Affairs Committee, and given only minimal office space and staff.^{Footnote 36} He was assigned to the Joint Economic Committee “because no one else wanted it,” according to his biographer.^{Footnote 37} However, Humphrey was able to turn the JEC—in part through his remarkable work ethic and enthusiasm for congressional politicking—into an effective platform. Serving on the committee, he said later, was “like going to a super-graduate school,” and by 1973 the Washington Post was applauding his “re-emergence as a spirited leader on Capitol Hill.”^{Footnote 38} From his perch as JEC chair, Humphrey would become one of the leading congressional advocates of national economic planning. “All industrial nations plan and have planning systems,” he wrote in 1975. “But the Federal Government continues to pursue an ad-hoc, piecemeal approach that is not only wasteful in its inefficiency but outright harmful in its short-sightedness.”^{Footnote 39}

As well as his long-established policy commitments, Humphrey nursed a desire to reclaim some of the credibility he had lost with the liberal wing of the party, once his natural constituency. As LBJ’s vice president, presidential nominee in 1968, and then principal rival to George McGovern in 1972, Humphrey had become, in the minds of many younger liberals, a symbol of the Democratic Party’s corrupt, war-mongering establishment.^{Footnote 40} The Gonzo journalist and McGovern supporter Hunter S. Thompson spoke for many when he described Humphrey as “a treacherous, gutless old ward-heeler” and “a shallow, contemptible, and hopelessly dishonest old hack.”^{Footnote 41} That alienation was a running sore for Humphrey and one he hoped to salve. At one point during the 1968 campaign—when he was being followed by angry protestors urging America to “Dump the Hump”—Humphrey reflected ruefully that he had “never left the liberals, even though some of them are disappointed in me.”^{Footnote 42}

The Humphrey-Javits bill never came to a floor vote. Advocates of national planning found that they struggled to build public support for such legislation. The most pressing economic issue when the bill was introduced was recession—unemployment peaked at 9 percent in the second quarter of 1975—but Humphrey-Javits offered little in the way of immediate relief. Leontief noted that a national planning board “could not possibly lead to the solution of the present crisis” but might “keep the country from stumbling into the next crisis.”^{Footnote 43} That was cold comfort to those on the dole lines in 1975. Supporters of planning found much more political traction when their aims were repackaged as a direct response to unemployment. This would bring Humphrey into an alliance with a California representative, Augustus F. Hawkins, in the first serious effort to enact full-employment legislation since the 1940s.

Louisiana-born and California-raised, Gus Hawkins came from a family that embodied two migrations undertaken by African Americans in the first half of the twentieth century: first, from the states of the Jim Crow South to the North and West; second, from the Republican to the Democratic Party. Hawkins’s father had been a staunch “Hoover Republican” while his son supported FDR in 1932, predicting the movement of African American voters into the Democratic coalition.^{Footnote 44} Like Humphrey, the Depression made Hawkins a Democrat. His hopes of pursuing a postgraduate course in civil engineering were shattered by the downturn of the 1930s. In 1934, he won a seat in the California State Assembly as a committed New Dealer, unseating an eight-term Republican incumbent.^{Footnote 45} In 1962, he sought and won election from a newly created, majority-black district, the 21st, becoming the first black member of Congress from any western state. At the heart of this district was the Los Angeles neighborhood of Watts, which would erupt into riots in August 1965.^{Footnote 46}

In Congress, Hawkins made employment policy his area of expertise. He was the principal author of Title VII of the 1964 Civil Rights Act, which outlawed employment discrimination on the basis of race, religion, sex, or national origin, and established the Equal Employment Opportunity Commission (EEOC). He became chairman of the Education and Labor Subcommittee on Employment Opportunities in 1972, using it to strengthen the EEOC and to press for various jobs programs. He understood the issue of African American advancement as essentially an economic rather than a racial problem. For Hawkins, casting policy issues in racial terms was an impediment to building broad coalitions of support. “Racializing an issue defeats my purpose—which is to get people on my side,” he once said.^{Footnote 47}

Hawkins’s aversion to “racializing” issues created tensions with other members of the Congressional Black Caucus and black activists outside Congress. Although Hawkins had been a founding member of the CBC, he often seemed somewhat detached from the group. He served only briefly in a leadership role, for instance, as vice chairman between 1971 and 1973. He was more comfortable than many black legislators with appealing to labor leaders for support. He was also a critic of the turn toward militancy by some black activists in the mid-1960s, calling for “clearer thinking and fewer exhibitionists in the civil rights movement.” In 1972, he was involved in a confrontation with the Congress for Racial Equality (CORE), when fifty members of the organization briefly occupied his Washington office to demand a voice for anti-integration activists in an education conference he was organizing.^{Footnote 48}

Nonetheless, Hawkins, who identified strongly with the activism of A. Philip Randolph, represented an established tradition within the civil rights movement, which saw civil and economic rights as being intertwined.^{Footnote 49} Randolph had kept the March on Washington movement alive after 1941 and it had become the inspiration for the 1963 March on Washington (a march for “Jobs and Freedom”). In 1966, Randolph and fellow activist Bayard Rustin had developed a “Freedom Budget” that contained a government-sponsored job guarantee. Martin Luther King had incorporated a federally backed right to a job into his “economic bill of rights” and his 1968 Poor People’s Campaign, and full employment had been one of the ten points of the Black Panther Party’s platform.^{Footnote 50} “Jobs for All” was an issue that had united African American activists across the political spectrum for decades.

The recession of 1973–75 gave fresh impetus to the cause of full employment among black activists. The unemployment rate for African Americans was consistently double that of whites, often rising to almost 50 percent for young black men. Moreover, as Hawkins wrote, those statistics underestimated the extent of the problem for both black and white Americans, by not including the “under-employed” (those in part-time work seeking full-time jobs) or the long-term unemployed.^{Footnote 51} Vernon Jordan, the president of the National Urban League, said that by any available measurements African Americans were enduring “a major depression.”^{Footnote 52} When the members of the CBC met with President Gerald Ford a few weeks after his inauguration in late 1974, they requested a public employment program.^{Footnote 53} As in the 1940s, the issue of full employment would bring together the civil rights movement and the advocates of national economic planning.

“A Big Bertha of Economic Theory”: The Humphrey-Hawkins Full Employment Bill

In August 1974, Humphrey and Hawkins joined together as cosponsors of the most ambitious full employment legislation since 1946. The Humphrey-Hawkins Full Employment bill directed the federal government to guarantee a job for all citizens over the age of sixteen. Though the preferred provider would be the private sector, those who remained without employment would be given public-sector jobs in local government, financed from federal coffers. Perhaps the most radical component empowered those who found themselves neglected to sue the government for injunctive relief and damages. This provision yoked the litigious rights-consciousness of 1960s liberalism to the New Deal’s preoccupation with material security. Moreover, the original bill set no nominal unemployment rate for a “full employment” economy. The government would strive to provide jobs for all who sought them.^{Footnote 54}

The means by which full employment was to be achieved were rooted in national planning ideas. The president would be required to submit an annual full employment plan to Congress, setting targets for employment, national production, and purchasing power. Congress would have the power to review and revise that plan, and the federal budget and Federal Reserve’s policies would have to be consistent with the finally agreed goals. The government would also be required to respond to economic distress with countercyclical measures such as increasing funding to state and local agencies, subsidizing private firms to take on more employees, financing public jobs, and establishing special youth programs. A permanent “full employment office” would be created within the Department of Labor to offer training programs, direct the unemployed toward public- and private-sector jobs, and maintain a “jobs reservoir” for those that could not find work elsewhere.^{Footnote 55}

Alongside a significant overhaul of the nation’s political economy, the Humphrey-Hawkins bill represented an effort to reunify the Democratic Party’s coalition and ease the racial tensions that had been rupturing it. As the economy tanked, Democrats had found themselves struggling to balance their commitment to eradicating racial inequality against their historical relationship with, and organizational dependency on, organized labor. By the mid-1970s, relations between trade unions and the Democratic Party were at a low ebb. Stagflation produced uncomfortable trade-offs, intensifying racial conflict within the working class.^{Footnote 56} Younger Democrats, particularly New Politics types who had been politically awakened by the civil rights movement, were often disdainful of unions, viewing them as parochial and innately racist. Humphrey, a pro-labor and pro-civil rights Democrat, believed that the contradictions were reconcilable and that a return to the politics of economic uplift offered a way out of the quagmire. According to Judith Stein, Humphrey-Hawkins “simultaneously reinserted African American interests into mainstream economic policy making and advanced black and white working-class interests.”^{Footnote 57}

The bill’s sponsors were encouraged by the fact that the political pendulum seemed to be swinging toward the Democrats. In the 1974 midterm elections, with Republicans shouldering much of the blame for Watergate and recession, Democrats recorded their biggest wins in a decade. With a net gain of 49 seats in the House, and 4 in the Senate (taking them to 291–144 and 61–39, respectively), the Democrats commanded technically veto-proof majorities in both chambers.^{Footnote 58} All members of the CBC who were up for reelection were returned and the group added Harold Ford of Tennessee to its ranks. A Democratic Congress with a resounding mandate now faced a Republican president for whom no one had voted. “I think the last election means the buck stops here,” Speaker Carl Albert informed the House Democratic Caucus.^{Footnote 59} Months earlier, Hawkins had told a conference at Columbia University that “the winds of change are blowing toward liberalism” and confidently predicted the swift passage of the full employment bill.^{Footnote 60}

The Ford administration was entirely unsympathetic to the bill, dismissing it as ineffective and inflationary.^{Footnote 61} However, the bill’s sponsors were not waiting for the White House to take the lead on the issue. Congress, Humphrey told the Senate Committee on Banking, Housing, and Urban Affairs, “must assume more of the responsibility for managing the nation’s economy.”^{Footnote 62} From 1975, utilizing his position as JEC chair, Humphrey set out to turn the congressional efforts into a public campaign. The committee toured some of the worst-hit cities in the nation, gathering testimony on their economic woes. The first of these regional meetings was held in October 1975 in Chicago, where the unemployment rate was 10.2 percent, almost two points above the national rate (8.3 percent). Among black Chicagoans, the unemployment rate stood at 19.8 percent (rising to 36.4 percent when one factored in “discouraged workers” and the underemployed).^{Footnote 63} “It is obvious to me,” declared Humphrey in his opening remarks, “that the old economic rules no longer apply.” Endorsements of the Humphrey-Hawkins Bill, or at least broad statements of support, came from academics, public officials, private citizens, and representatives from labor unions and activist organizations, including the National Organization for Women (NOW), the Chicago Urban League, and local chapters of the United Steelworkers, the UAW, and the United Electrical Workers (UE).^{Footnote 64} From Chicago, the Humphrey-Hawkins roadshow made appearances in New York, Atlanta, Los Angeles, and Boston.

This publicity blitz was supposed to make the bill an election issue for 1976. Humphrey and Hawkins planned for some version of the full employment bill to pass before November, to be greeted by a presidential veto, with which the Democratic candidate could beat Ford all the way to election day. The New Republic noted that Humphrey-Hawkins was “a Big Bertha of economic theory . . . a siege gun that will be used to lob criticisms at President Ford during the election campaign.”^{Footnote 65} Even without a congressional vote, however, regular reports from the Joint Economic Committee condemned the Ford administration, demanded action on unemployment, and ensured that attention would be paid to the Democratic alternatives. A March report in response to the President’s January Economic Report identified unemployment as the principal issue facing the nation and declared America “the victim of misguided policies.” It called for greater stimulative measures in response to the crisis and condemned Ford’s fiscal conservatism: “The President’s 1977 budget is so restrictive that it does not serve as a useful starting point for budget policy deliberations.”^{Footnote 66} Later that month, the JEC led the commemoration of the thirtieth anniversary of the passage of the Employment Act of 1946, staging a two-day conference on full employment in Washington, D.C.^{Footnote 67}

Humphrey was widely considered a front runner for the Democratic presidential nomination in 1976. U.S. News and World Report surveyed 162 members of the Democratic National Committee in November 1975 and discovered that 49 percent expected Humphrey to be the next presidential nominee.^{Footnote 68} Ford himself expected to face Humphrey in the election.^{Footnote 69} Humphrey refused to formally declare himself a candidate, but he did make clear his receptivity to a convention draft. Though this eventuality never arose, Humphrey had an outsize impact on the presidential primaries.^{Footnote 70} Nearly all Democratic candidates endorsed Humphrey-Hawkins in some form, with the noteworthy exception of former Georgia governor Jimmy Carter. Lawrence Klein, coordinator of Carter’s economic task force, told Time that it could become “an albatross” but that he could “envision no amendments that would make this a good bill.” Carter shied away from a firm commitment, but told journalists that 3 percent unemployment “as a goal” was “a good one.”^{Footnote 71} According to one journalist, Humphrey-Hawkins had become the “current shibboleth of Democratic liberalism.”^{Footnote 72}

Carter’s victory in the Democratic primaries came in spite of his tepid endorsement of the Humphrey-Hawkins bill, which commanded widespread support within the party’s coalition. His nomination was as much the product of his distinctive political persona and the crowded primary field as any policy agenda.^{Footnote 73} Though Carter avoided the subject, the party platform endorsed full employment legislation, albeit without mentioning Humphrey-Hawkins by name.^{Footnote 74} Carter’s eventual embrace of the bill—in an effort to reassure black voters after an ill-advised remark expressing sympathy with those who sought to maintain the “ethnic purity” of their neighborhoods—underscored the strength of the pro-Humphrey-Hawkins blocs in the party and Carter’s willingness to accommodate their demands under pressure.^{Footnote 75}

Carter’s ambivalence notwithstanding, Humphrey-Hawkins continued to gather momentum as the election approached. By mid-1976, the passage of some form of full-employment legislation seemed increasingly likely. President Ford understood this, condemning the proposals as “dangerously deceptive” and “a vast election year boondoggle” that would be halted by presidential veto if necessary.^{Footnote 76} With the exception of Senator Edward Brooke of Massachusetts (the only African American in the Senate), the entire Republican congressional caucus was united against it. Similar opposition came from conservative economists. In his testimony to the Chicago hearings, Milton Friedman told the JEC that the nation’s economic problems “don’t arise from the absence of planning . . . [but] from substituting planning by the visible hand of government for planning by the invisible hand of market.” Federal Reserve Board Chairman Arthur Burns told the Senate Banking Committee that the bill was “dangerous and inflationary.”^{Footnote 77}

With his presidential prospects extinguished, Humphrey explored options to ensure that full employment legislation remained a priority for the next, almost certainly Democratic, administration. He had set his eyes on the position of Senate Majority Leader, left vacant by incumbent Mike Mansfield’s retirement, which would have given him direct influence over the legislation that reached the Senate floor. However, Humphrey lost that contest decisively to West Virginia’s Robert C. Byrd. Though Byrd was a conservative southerner—a member of the Ku Klux Klan in his youth who had filibustered the 1964 Civil Rights Act—Senate members were swayed by his reputation as a man who could run the Senate efficiently and deliver favors for his colleagues.^{Footnote 78} Disorganized and usually tardy, Humphrey could not match his rival’s service-oriented platform. Moreover, a few months before the election, a cancer-stricken Humphrey underwent major surgery to remove his bladder.^{Footnote 79} Nonetheless, Humphrey’s defeat did not suggest that Congress would quiescently follow the White House’s lead. Freshman senator Gary Hart distilled the sentiment when he said that the Senate Majority Leader would act as “a hollow log in which both sides leave messages.”^{Footnote 80}

Given Carter’s wariness, it might be assumed that Humphrey-Hawkins was a pipe-dream entertained by a band of aging New Dealers, unable to reconcile themselves to an increasingly conservative electorate. Americans were certainly growing more resentful of tax burdens and inflation alternated with unemployment as the public’s principal concern. However, the available polling data reveals a more complicated attitude toward government activism. A Time/Yankelovich poll taken in August 1976 showed 56 percent in favor of an indeterminate full employment bill “in which the government guarantees a job to everyone who wants to work.” Another poll taken by the same organization in March 1977 showed that support had climbed to 60 percent. A further poll, taken in October 1977 by Cambridge Reports/National Omnibus Survey, showed 54 percent specifically in favor of the Humphrey-Hawkins bill, compared to 29 percent opposed. Even in November 1980, as the Reagan revolution was apparently surging to power, an ORC Public Opinion Index poll showed 78 percent of respondents were in favor of the federal government doing more to provide jobs for all Americans who were able to work during the 1980s.^{Footnote 81} Federal full-employment legislation enjoyed consistently solid public support throughout the 1970s. However, as the mid-decade recession temporarily subsided, the Carter administration chose to prioritize inflation and balancing the budget over unemployment.

The Carter administration’s reluctance to move forward with full employment legislation created friction with the bill’s supporters in Congress, and especially with the Congressional Black Caucus. In March 1977, just two months after the inauguration, special assistant Valerie Pinson reported a fractious meeting with members of the CBC and supportive groups who wanted “to blast the President because of his lack of support for the bill.”^{Footnote 82} “We are sitting on a timebomb here which will explode unless we move quickly,” chief domestic policy adviser Stuart Eizenstat wrote in a memo two weeks later.^{Footnote 83} In June, Humphrey and Hawkins wrote to the president noting that they had not yet “obtained a reaffirmation of your position on the Bill this year, nor any specific suggestions for further improvements in it from your representatives.” A “clarification” on those points, they suggested, would be “mutually beneficial to all concerned.”^{Footnote 84}

Similar pressure came from African American groups outside the national government. At the 67th annual meeting of the National Urban League, executive director Vernon Jordan criticized the administration for “not living up to the first commandment of politics—help those who help you.”^{Footnote 85} In November 1977, Jordan endorsed Humphrey-Hawkins, calling it “a short-term promissory note to be redeemed in jobs.”^{Footnote 86} A month earlier, when the NAACP board of directors met with Carter, the issue of jobs was at the top of their eighteen-item agenda.^{Footnote 87} Black activists had reason to expect, indeed demand, such a commitment from the White House. Carter’s narrow victory in 1976 had been made possible by his sweep of the southern states, where African American voters had often provided his margin of victory. As Walter E. Fauntroy, delegate for the District of Columbia, remarked, “hands that picked cotton had picked a president.”^{Footnote 88}

Carter’s concerns over the inflationary impact of the bill and his determination to curtail excessive spending proved the most significant stumbling blocks. The negotiations to agree to a “full employment unemployment rate” were some of the most torturous.^{Footnote 89} After initial talks, Office of Management and Budget director Bert Lance reported to Carter that Hawkins regarded “both a very low numerical full employment unemployment rate and a guarantee of government jobs as essential ingredients of any bill he would sponsor.” As neither of these was acceptable to Carter, there might “be no version which could be consistent with both moderate principles of economic policy and the true objectives of the sponsors of the bill.”^{Footnote 90} House Speaker Thomas P. “Tip” O’Neill advised Carter’s staff “to put in the low unemployment rate as the sponsors want and just not worry about it.”^{Footnote 91} Eizenstat urged the importance of “the Administration [being] perceived as having made every effort to reach an accommodation.”^{Footnote 92} The administration was unsuccessful in persuading Humphrey and Hawkins to prefix the unemployment goals with the words “about” (i.e., “about 4 percent”). Though this would have had little practical impact, it would convey “some image of flexibility in the bill to counter conservative and moderate critics.” The bill’s sponsors rejected this on the same grounds: “They want an image which, to the maximum extent possible, appears to bind the President to hard targets.”^{Footnote 93}

In his discomfort with Humphrey-Hawkins, Carter found some allies within Congress. Many of the Democratic legislators first elected in 1974 were skeptical of the bill. Nicknamed the “Watergate Babies,” they were generally younger, inexperienced, and reliant on suburban voters, to whom they had appealed with fiscally conservative and anticorruption messages. One Watergate Baby, Colorado representative Tim Wirth, noted later that “our constituents are changing. . . . They used to be labor, blue-collar and minority-oriented. Now, as in my case, they are suburban, with two working parents—a college-educated, information age constituency.”^{Footnote 94} This support base had a decisive impact on the priorities and the outlook of many younger Democrats in Congress. Soon after his election in 1974, Wirth’s colleague from Colorado, Senator Gary Hart, observed, “We’re not a bunch of little Hubert Humphreys.”^{Footnote 95} These legislators were instinctively suspicious of grand federal schemes, and more sympathetic to Carter’s liberalism of limits than the expansive vision of Humphrey-Hawkins.

The administration’s reluctance was also informed by the opposition of business interests. Business antipathy to big government had existed since the New Deal, but by the end of the 1960s it was encountering a more receptive public.^{Footnote 96} Unlike in the 1930s, there was no widespread sense that the present economic crisis was due largely to the fecklessness of corporate America and the inactivity of the government. The prospect of Humphrey-Hawkins, or legislation like it, increasing federal intervention in the market economy was deeply unsettling for business leaders. Three days after Carter’s inauguration, James H. Evans, president and CEO of the Union Pacific Corporation, used a New York Times op-ed to dismiss Humphrey-Hawkins as “old fashioned and wrongheaded,” a ‘“big brother”’ scheme that would “eat up” taxes, spur “devastating” inflation, and offer, at best, only temporary respite from unemployment.^{Footnote 97} The Chamber of Commerce, the National Association of Manufacturers, and the Business Roundtable were all flatly opposed to the bill, citing its likely inflationary effects. Along with other business organizations, they mounted a vigorous lobbying effort, “sending executives to pay personal calls to senators, promoting packaged editorials . . . , and mobilizing letter-writing campaigns.”^{Footnote 98} Eizenstat had warned Carter that the administration should expect to be “blast[ed] by the business community” regardless of any “substantial revisions” to the bill. Indeed, he wrote, “the term “Humphrey-Hawkins Bill” has taken on a dynamic of its own and can be seen as a code word for excessive spending.”^{Footnote 99}

Some of the most damaging criticisms of the bill came from liberal economists. John Kenneth Galbraith, for instance, begged optimistic Democrats not to succumb to the “wishful economics” of imagining there was “some undiscovered fiscal or monetary magic” that could control both inflation and unemployment.^{Footnote 100} Charles Schultze, the chair of the CEA, was adamantly opposed to the bill in its original form, despite styling himself as a “friendly” critic. Although he eventually supported Humphrey-Hawkins as “a broad and flexible instrument,” he cautioned a House subcommittee that it was “unlikely” that a four percent unemployment rate could be achieved “without at the same time causing increased inflation.”^{Footnote 101} The bill’s most forthright defender among economists was Leon Keyserling, a principal drafter of the 1946 Employment Act and the first chair of the CEA.^{Footnote 102} He urged its passage in congressional testimony, on the op-ed pages, and in a flurry of private, often tetchy, letters to his colleagues.^{Footnote 103}

If many economists were lukewarm on the bill, Humphrey and Hawkins could count on vigorous activist support. In early 1975, a coalition of labor unions, religious and civil rights groups, and community organizations established the Full Employment Action Council (FEAC) to lobby legislators to pass the bill, co-chaired by Murray H. Finley of the Amalgamated Clothing Makers Union and Coretta Scott King, president of the Martin Luther King Jr. Center and King’s widow.^{Footnote 104} Many feminist groups, including the National Organization for Women (NOW), also lined up behind the bill.^{Footnote 105} Their participation reflected the growing strength of feminist activism, and the increasing focus of the women’s liberation movement on legislative goals alongside consciousness-raising activities. Women’s rights groups could point to their success in pressing Congress to pass the Equal Rights Amendment in 1972 as evidence of their increasing clout and skill.^{Footnote 106} NOW cofounder Betty Friedan predicted that, to make significant economic gains, the women’s movement would have to make alliances with “with old people, young people, heart-attack-prone executives, trade unionists, blacks and other minorities.”^{Footnote 107} In July 1976, full employment legislation would be one of the demands made by women’s groups demonstrating at the Democratic National Convention at New York’s Madison Square Garden.^{Footnote 108}

Feminist organizations supported Humphrey-Hawkins in spite of the fact that, as Robert Self argues, debates over full employment “revealed that neither conservatives nor most liberals had yet abandoned the male-breadwinner model of the economy.” One early version of the bill, for instance, placed a cap on the “number of employed persons per household” who could benefit, a provision that would almost certainly have discriminated against women. Pressure from women’s groups meant that the final bill replaced the workers per household limit with one based on household income.^{Footnote 109} In drafting the bill, New Politics groups and old-guard Democrats worked to resolve such ideological tensions, contradicting the traditional image of permanent conflict between those factions over mutually irreconcilable visions of liberalism.

In an effort to assuage concerns about its inflationary impact, Humphrey and Hawkins initially incorporated wage and price controls into the bill, before objections from organized labor forced their removal.^{Footnote 110} Similar objections from the AFL-CIO compelled the bill’s supporters to remove its most potent enforcement mechanism: the legally-enforceable right to a job.^{Footnote 111} The bill was revised numerous times, both to strengthen its anti-inflation provisions and to win the support of the White House. By November 1977, a shaky accord had finally been reached between the pro–Humphrey-Hawkins forces and the administration. In a joint press release, Humphrey and Hawkins declared themselves “pleased” with the agreement and predicted “favorable” action on the modified bill in the new year.^{Footnote 112} FEAC chairs Coretta Scott King and Murray Finley endorsed the bill, calling it “an essential first step toward full employment.” In a memo circulated to local coalitions and supporters, Executive Director John Carr announced that the FEAC was “going on the offensive” against those who called the bill “an empty gesture or a costly spur to inflation.” The group intensified its lobbying efforts, petitioning hostile newspapers, organizing educational conferences, and recruiting sympathetic legislators.^{Footnote 113}

Humphrey’s death in January 1978 was a further impetus for the bill’s supporters. Its passage would be, said Labor Secretary Ray Marshall, “as fitting a tribute to Senator Humphrey as this Congress, and this Nation, could pay.”^{Footnote 114} However, the fate of the bill remained uncertain until its passage. Though the Carter administration had finally thrown its weight behind a revised version of Humphrey-Hawkins, the bill seemed close to expiring on several occasions as it ground its way through Congress. Republican opponents threatened procedural blockades and sought to hamstring the law with amendments, despite cajolery and public criticism from the White House. In an effort to avoid a filibuster, and with little hope of assembling the supermajority needed to overcome one, the bill’s supporters were compelled to dilute it further to appease vocal congressional opposition. Utah’s Orrin Hatch, a conservative Republican senator then in his first term, was so influential in shaping the final iteration that some jokingly began referring to the final bill as the Humphrey-Hawkins-Hatch Act.^{Footnote 115}

In October 1978, Carter signed a neutered version of the bill into law. Having been introduced as the Equal Opportunity and Full Employment bill, Humphrey-Hawkins ended its troubled passage through the legislature as the Full Employment and Balanced Growth Act. It was something of a smorgasbord. Alongside the unemployment targets, the Act enjoined the government to hold inflation at 3 percent, to balance the federal budget, keep prices stable, and to produce an international trade surplus. It offered no new mechanisms to enforce any of these goals and only required the president to set nonbinding numerical goals for the economy. The second attempt to enforce full employment legislation since World War II had, it seemed, suffered a similar fate as its predecessor.

“A Small Symbolic Step Forward”: Conclusion

At the bill signing in October 1980, flanked by Senator Muriel Humphrey (appointed to fill her husband’s seat earlier that year) and Congressman Hawkins, Carter offered praise for the bill’s drafters and measured remarks for its contents: “Although attaining the unemployment and the inflation goals of this bill will be very difficult, we will do our best to reach them.” The president dismissed criticism that the act’s provisions were so diluted as to be meaningless, remarking that “if the bill wasn’t [substantial], the struggle wouldn’t have been so hard.” Its supporters were more fulsome. “I think we’re on our way,” said Hawkins proudly, pronouncing the new act nothing less than “a modern-day Magna Carta of economic rights.” FEAC co-chair Coretta Scott King suggested that perhaps “history will record that it may be even more significant” than the 1964 Civil Rights Act and 1965 Voting Rights Act because it concerned “the most basic of all human rights, the right to a job.”^{Footnote 116}

Such praise concealed obvious disappointment with the outcome of this legislative struggle. AFL-CIO lobbyist Ken Young, for instance, conceded only that the act was “a small symbolic step forward,” but that it had been “weakened . . . severely” by the Senate.^{Footnote 117} A bill that had been introduced to revolutionize the political economy of the United States had been stripped of its most potent provisions and recast as an aspiration rather than a requirement of federal policy. At first glance, then, this is a story that confirms the traditional interpretation of U.S. politics in the 1970s: liberals failed to understand the true nature of the crisis, found to their horror that time-worn solutions no longer worked, and were swept aside by a conservative resurgence. However, this interpretation oversimplifies the case of Humphrey-Hawkins and ignores a clear moment of contingency that was subsequently obscured by conservative successes.

The reasons for the bill’s dilution were manifold. However much Humphrey hoped that Congress might play a coequal role in national planning, he and his allies discovered that grand visions of a “New New Deal” would go nowhere without forceful presidential leadership. Ford was a roadblock and Carter had little interest in being FDR’s second coming. Carter’s concern for inflation and budget deficits made him wary of high-spending programs like Humphrey-Hawkins, especially as he had promised repeatedly during the 1976 campaign to balance the budget by 1980. But it would be a mistake to characterize these legislative struggles as a case of a predominantly “liberal” Congress continually frustrated by two “conservative” presidents. Carter enjoyed considerable support in his fiscal conservatism from numerous congressional Democrats.^{Footnote 118}

However, the Humphrey-Hawkins Act passed. Given the considerable headwinds it faced, it is in some respects remarkable that the bill succeeded in passing in any form. It passed because so many political actors had an interest in ensuring that a full employment law was enacted, even a compromised one. Congressional Democrats needed to show the public that they were doing something about unemployment—and that they were doing something proactive about the stagnating economy more broadly. Carter needed to hold on to the support of the Democratic blocs that championed full employment and economic planning, which underscores their importance to the party even in the 1970s. As Stuart Eizenstat reminded the president during the negotiations, “The more warmly we can endorse the bill and with the fewer caveats, the more we will solidify our relationship with the Black Caucus and the black community, as well as the liberal community.”^{Footnote 119} The administration had already taken flak for embracing the bill in the first place; to abandon it entirely would only have discredited the White House with the bill’s supporters as well.

The Humphrey-Hawkins episode reveals a Democratic Party struggling to come to terms with the twin legacies of the New Deal and the 1960s. Democrats like Humphrey and Hawkins were anxious to demonstrate that solutions predicated on vigorous government activism were still relevant in the era of stagflation. By enshrining the “right to a job” in law, they sought to demonstrate that federal power could once again be mobilized to tame the business cycle. They also sought to demonstrate that the New Deal’s “universalist” ideology was capacious enough to incorporate once-excluded groups who sought full economic citizenship. In this, they enjoyed the support of many campaigning organizations, most notably African American and feminist groups, who had long understood the connections between questions of economic status and their other objectives. Beneath the broader story of the bill’s failure, the fact that such groups could be drawn into cohesive political coalitions with, for instance, labor unions, seemed to offer the hope for a renewed Democratic majority around traditional pocketbook issues. Such a majority never materialized, but the fact that this legislation was politically viable in the 1970s, and indeed commanded such widespread public support, is a standing rebuke to the idea that the crises of the decade were destined to produce a popular swing away from government activism and toward market solutions.