Tag Archives: The Economy Act of 1933

Equal Treatment for All Social Classes?

Emblematic of the problems of income and healthcare inequality, an upper-class man boasts that his wealth will increase if Obamacare is repealed.
Emblematic of the problems of income and healthcare inequality, an upper-class man boasts that his wealth will increase if Obamacare is repealed.

 

Discrepancies in the treatment of the rich and poor have long been a hot topic in the United States, and more recently, this issue has manifested itself in the realm of healthcare. The Affordable Care Act (ACA) is a “comprehensive health care reform law enacted in March 2010” during Barack Obama’s Presidency and is supported emphatically by the Democratic Party (“Affordable Care Act (ACA) – HealthCare.gov Glossary”). The ACA provides many millions of previously uninsured Americans access to affordable healthcare. As Nancy Pelosi, former US Speaker of the House, said upon passage of the law, “Today we have the opportunity to complete the great unfinished business of our society and pass health insurance reform for all Americans as a right, not a privilege” (Murray and Montgomery “House Passes Health-Care Reform Bill without Republican Votes”). For almost a decade, thereafter, the Republican Party has adamantly opposed this legislation, derisively referring to it as “Obamacare” or “socialized medicine.” Some of the most vociferous opposition has come from the populist Tea Party that “loves Medicare but hates ‘Obamacare’” (Gerard “Why the Tea Party Loves Medicare but Hates Obamacare”). Ironically, many Obamacare detractors oppose the health care reform that is in their best interests. As of July 2017, a report in Newsweek noted that there have been “at least 70 Republican-led attempts to repeal, modify or otherwise curb the Affordable Care Act” (Riotta “GOP Aims to Kill Obamacare Yet Again after Failing 70 Times”). Nevertheless, the ACA remains the law of the land. Even in the era of the Trump Presidency and the Republican-controlled House and Senate, majority of Americans have turned against efforts to repeal and replace Obamacare because doing so would provide significant tax breaks for the wealthiest Americans while removing healthcare coverage for millions of middle and lower-class citizens along with downstream detrimental effects (Alic “Patient Protection and Affordable Care Act”). Monte Wolverton’s political cartoon, “Obamacare Repeal Good for the Rich,” takes a heavily sarcastic tone in addressing these disparities by utilizing an affluent appearing cartoon figure’s commentary to address the blatant inequities inherent in GOP efforts to do away with the ACA.

Before the passage of the Affordable Care Act in 2010, it was estimated that over 53 million Americans were living without healthcare coverage and millions more were underinsured due to the increasing price tag (Alic “Patient Protection and Affordable Care Act”). In order to combat these alarming truths, the Affordable Care Act was passed on March 23, 2010, and under the law, more than 20 million previously uninsured Americans were granted healthcare coverage. ACA coverage is funded, in large part, through higher taxes on individuals making over $200,000 and couples making $250,00 in annual income such as the 3.8% investment income tax or .9% payroll tax (Horsley “GOP Health Care Bill Would Cut About $765 Billion In Taxes Over 10 Years”).

By contrast, Republicans, through their various repeal-and-replace bills, hoped to redistribute hundreds of billions of dollars by providing large tax cuts to the wealthy. The aforementioned taxes on the upper class that were required for establishment of the ACA would be targeted for repeal. It has been estimated that this would result in cutting around $247 billion collectively, and, by 2020, it would save those making over $1 million in income about $15.9 billion (Drucker. “Wealthy Would Get Billions in Tax Cuts Under Obamacare Repeal Plan”).

In addition to the proposed beneficial tax cuts for those in the upper annual grossing bracket, only approximately 20% of the American population, the repeal-and-replace effort was estimated to cause 23 million Americans to lose their healthcare coverage by 2026 because of impending increases in the cost of insurance rates. For example, people with incomes up to the 150% poverty level who currently pay a $255 a-per month deductible under the Affordable Care Act would face a new deductible price tag of more than $6,000 (Michael “How Many People Will Die from the Republicans’ Obamacare Repeal Bills? Tens of Thousands per Year”). This grossly immense disparity in healthcare payments for the majority of the population would directly result from removing taxes imposed on the affluent. This raises questions about the true aims of the GOP’s various plans to repeal-and-replace Obamacare.

Whereas the Democratic Party tends to “rely more heavily on government intervention to influence the economy’s direction and keep the profit motive of businesses more at bay,” the Republican Party traditionally organizes its economic agenda as a “business friendly” approach that limits government economic regulations and avoids “restrictions that might seek to dimunize the pursuit of profits in favor of… healthcare benefits” (Fuhrmann “Republican and Democratic Approaches to Regulating the Economy”). Thus, Republicans approached their repeal-and-replace proposals from the perspective that the tax cuts not only would directly help the rich but also find their way to the lower classes through what is known as the “Trickle-Down Effect.” “Trickle-Down Economics” is an economic theory that promises economic growth through the practice of providing large benefits and tax breaks to the wealthy in the hopes that the wealth will be distributed down the social class ladder through the creation of new jobs and economic stimulus. When the theory was applied in the early 1960’s and 1980’s, however, those most negatively affected were middle to lower-class workers and small business owners due to their inability to compete with ever-growing corporations that actually hindered money, jobs, and other purported benefits from trickling down. In fact, “Trickle-Down economics” policies only facilitated the increasing gap between the poor and the rich (Wilson “Trickle-Down Theory”).

Wolverton’s political cartoon, “Obamacare Repeal Good for the Rich,” takes the stance of opposing the desired Republican repeal of the Affordable Care Act and the GOP’s proposed replacement schemes. The artist’s choice of character, a well-dressed, distinctly wealthy man, represents the wealthiest American’s as a whole. With his champagne and pet, the affluent character has isolated himself on a desert island, a reflection of the separation of the upper and lower-classes in the Unites States. Drinking champagne, an extravagance, he toasts the Republican’s proposed plan to replace the ACA. Through the character’s dialogue, especially the reference to wealth “trickling-down” so that “maybe” other social classes can afford health insurance, Wolverton asserts his opinion that the GOP-led-repeal-and-replace propositions are unfair.

The cartoonist underscores this fundamental unfairness by bolding the “good news” that by “repealing Obamacare” the “tax break” for the “wealthiest Americans” will “trickle down” to the “rest” us so that “then” perhaps we can afford “insurance.” The asterisk mark in Wolverton’s illustration points readers to the evidence: a 2017 report authored by Brandon Debot and published by the Center on Budge and Policy Priorities. In his analysis of the unbalanced tax breaks proposed by the GOP through repeal-and-replace of Obamacare, Debot and the CBPP estimate that the “400 highest-income taxpayers — whose incomes average more than $300 million a year — would get average tax cuts of at least $15 million a year each,” while the benefits for working families are seldom noted; in fact, the likelihood of primarily adverse effects is anticipated (Debot “Trump Tax Plan Would Give 400 Highest-Income Americans More Than $15 Million a Year in Tax Cuts”).

Obamacare Repeal Good for the Rich” is reminiscent of the 1933 John Knott cartoon, “Regardless of Dress.” Both comics express concern about the unequal treatment of American citizens, especially inequities in their wealth and well-being, vis-à-vis the pressing economic issues of their respective times—i.e., the Great Recession and the Great Depression. In Wolverton’s case, he approaches the attempted repeal of “Obamacare” with a sarcastic tone. The artist juxtaposes the treatment of the rich and the poor, highlighting repeated attempts to, by, and for the wealthy to undermine ACA legislation aimed to directly assist poor individuals in gaining access to healthcare. Republican repeal-and-replace efforts, by contrast, would only indirectly aid the poor by “trickling down.” For the non-affluent, their access to healthcare would only occur if and when wealth generated from tax cuts for the rich gradually permeated down from the highest to the lowest classes. For his part, Knott also addressed the need for balanced and shared sacrifice as part of the New Deal. His illustration focused on Franklin D. Roosevelt’s Economy Act of 1933, which cut millions of federal dollars from some programs receiving an unbalanced amount of aid in order to more equitably reallocate those funds to other groups in need (Knott “Regardless of Dress”).

“Roosevelt at Chicago,” and editorial that accompanied Knott’s political cartoon in the Dallas Morning News, provided a more in-depth explanation of Knott’s visual commentary on Roosevelt’s legislative actions for equal treatment to all American citizens. A precursory discussion of extreme inequities in wealth allocation in America then and now, the 1933 editorial explained FDR’s call for cutting unequal funding from banks and veterans and redistributing the money to other constituencies in need—a call for fairness that Wolverton echoed decades later (The Dallas Morning News “Roosevelt at Chicago,” Knott “Regardless of Dress,” Wolverton “Obamacare Repeal Good for the Rich”).

Both Wolverton’s and Knott’s cartoons shed light on economic inequality during the most trying economic times of the current and previous centuries. The contemporary comic mocks the GOP’s Trickle-Down economic agenda and its restrictive impact on healthcare access for ordinary Americans while the Depression-era drawing depicts Roosevelt’s direct, bottom-up approach to combating economic suffering and inequality by reallocating monetary assistance and jobs to those most in need. Together, the two illustrations not only highlight how those in power conceptualize wealth and equity but also how legislative policies affect average citizens.

Wolverton’s cartoon evokes humor through the satirism of the GOP’s repeal-and-replace proposal and views of healthcare being voiced in America during 2017. Its importance rings with majority of US citizens due to their social standing and the effect that may have on their access to affordable healthcare in the near future.

 

Works Cited

“Affordable Care Act (ACA) – HealthCare.gov Glossary.” HealthCare.gov,   www.healthcare.gov/glossary/affordable-care-act/.

Alic, Margaret. “Patient Protection and Affordable Care Act” The Gale Encyclopedia of Medicine. Ed. Jacqueline L. Longe. Vol. 6. 5th ed. Farmington Hills, MI: Gale, 2015.p3866-3870.

Debot, Brandon. “Trump Tax Plan Would Give 400 Highest-Income Americans More Than $15 Million a Year in Tax Cuts.” Center on Budget and Policy Priorities, 11 Oct. 2017,             www.cbpp.org/research/federal-tax/trump-tax-plan-would-give-400-highest-income-  americans-more-than-15-million-a.

Drucker, Jesse. “Wealthy Would Get Billions in Tax Cuts Under Obamacare Repeal Plan.” The New York Times, The New York Times, 11 Mar. 2017, www.nytimes.com/2017/03/10/business/tax-cuts-affordable-care-act-repeal.html.

Fuhrmann, Ryan C. “Republican and Democratic Approaches to Regulating the Economy.” Investopedia, Investopedia, 18 May 2018,   www.investopedia.com/ask/answers/regulating-economy.asp.

Gerard, Leo. “Why the Tea Party Loves Medicare but Hates Obamacare.” Thousands of Garment Factory Workers Across Cambodia Are Fainting on the Job, inthesetimes.com/article/15732/the_tea_partys_misconception_of_medicare.

Hiltzik, Michael. “How Many People Will Die from the Republicans’ Obamacare Repeal Bills? Tens of Thousands per Year.” Los Angeles Times, Los Angeles Times, 26 June 2017,             www.latimes.com/business/hiltzik/la-fi-hiltzik-repeal-deaths-20170623-htmlstory.html.

Horsley, Scott. “GOP Health Care Bill Would Cut About $765 Billion In Taxes Over 10 Years.” NPR, NPR, 4 May 2017, www.npr.org/2017/05/04/526923181/gop-health-care-bill-would-cut-about-765-billion-in-taxes-over-10-years.

Knott, John. “Regardless of Dress” The Dallas Morning News, 4 Oct. 1933.

Murray, Shailagh, and Lori Montgomery. “House Passes Health-Care Reform Bill without    Republican Votes.” The Washington Post, WP Company, 22 Mar. 2010,  www.washingtonpost.com/wp-dyn/content/article/2010/03/21/AR2010032100943.html.

Riotta, Chris. “GOP Aims to Kill Obamacare Yet Again after Failing 70 Times.” Newsweek, 29 July 2017, www.newsweek.com/gop-health-care-bill-repeal-and-replace-70-failed-attempts-643832.

“Roosevelt at Chicago.” The Dallas Morning News, 4 Oct. 1933.

“Trickle-Down Theory” Historical Encyclopedia of American Business. Ed. Richard L. Wilson. Vol. 3. Pasadena, CA: Salem Press, 2009.p872-873. Wolverton, Monte. “Obamacare Repeal Good for the Rich.” Cagle, 23 Jan. 2017, www.cagle.com/monte-            wolverton/2017/01/obamacare-repeal-good-for-the-rich.

LET’S EVEN OUT THE SCALES!

President Roosevelt points to a sign reading “EQUAL RIGHTS TO ALL SPECIAL PRIVILEGES TO NONE,” while a banker and veteran look on in anticipation of more equitable cuts in federal spending.
President Roosevelt points to a sign reading “EQUAL RIGHTS TO ALL SPECIAL PRIVILEGES TO NONE,” while a banker and veteran look on in anticipation of more equitable cuts in federal spending.

 

In 1933, as the United States sought to pull its struggling economy out of the Great Depression, the American people looked for guidance from newly-elected President Franklin D. Roosevelt. FDR promised to reform the damaging actions brought on by his predecessor, President Herbert Hoover, and to improve the nation’s economic state. John Knott’s political cartoon, “Regardless of Dress,” addresses one of the many reforms enacted as part of Roosevelt’s New Deal: specifically, the Economy Act of 1933. This act reduced the amount of federal aid given to banking and veteran programs to equalize treatment of struggling American citizens. Evoking parallels to Andrew Jackson’s populist slogan, “equal rights to all, special privileges to none,” Knott’s illustration underscores the importance of Roosevelt’s impact on veterans and the banks through his New Deal economic recovery programs.

The Great Depression was the period from 1929-1939, during which time the American economy took an unprecedented downturn. After the stock market crash on October 29, 1929, the nation’s economic state began a precipitous decline, as consumer spending and investment plummeted. Job scarcity became such a widespread problem that by 1932, the nation’s unemployment rate had risen to 25% (Baughman “The 1930s: Government and Politics: Overview”). Hoover’s spending approach for aiding the effects of the Great Depression was an inclination to give “indirect aid to banks or local public works projects, but he refused to use federal money for direct aid to citizens” (Hoover “The Gilder Lehrman Institute of American History”). During Hoover’s Presidency, America’s budget deficit ballooned from a $734 million surplus in 1929 to a $2.7 billion deficit in 1932 (Morgan “Deficit Spending”). To compare it to today’s standards, while the 2017 federal government’s deficit rose to $668 billion, an $82 billion increase, that remains only a 12% increase rather than the 663% rise during Hoover’s term (Niv “US Deficit Spending Reached $668 Billion in Fiscal 2017”). Roosevelt’s election in 1932 brought on a series of reforms aimed to counter Hoover’s tactics. In his approach to economic recovery, however, FDR adopted a populist approach for addressing the struggles of the common man.

When Franklin D. Roosevelt took office in 1932, his actions immediately reflected the populist ideals of assisting ordinary American citizens, and his New Deal economic recovery plans were intended to directly help the American people. The First New Deal was a procession of economic reforms as well as a series of national aid and federal programs created with the purpose of bringing the United States out of the Great Depression; furthermore, these initiatives were promised to be implemented within Roosevelt’s first 100 days in office. Because an entire quarter of the US population was unemployed, these aid programs stretched across a swath of occupational categories and social classes (Baughman “The 1930s: Government and Politics: Overview”).

Programs such as the Federal Emergency Relief Act (FERA), which provided $500 million in grants directly to states to “infuse relief agencies with the much-needed resources to help the nearly fifteen million unemployed,” were aimed at mitigating the subsidiary monetary channels that, in the past, had slowed progress of economic improvement (Lumen Learning “Franklin Roosevelt and the New Deal, 1932-1941”).

Given the nation’s poor economic state, however, Roosevelt also aimed to refrain from unnecessary excessive spending. Thus, he introduced the Economy Act of 1933 which cut around $400 million from federal payments to veterans and $100 million from the payroll of federal employees (Morgan “Economy Act of 1933, Special to The New York Times). Not only did this act recognize the unequal distribution of governmental monetary resources, it also helped equalize funding through redistribution to people via Roosevelt’s newly created programs.

Alluding to the spending cuts spurred by the Economy Act of 1933, Knotts’ cartoon highlighted the shared sacrifice that was required for economic recovery, legislated in FDR’s populist policies, and inspired by Jacksonian Democratic themes. The illustration featured three figures: a banker/civilian, a veteran, and FDR. Roosevelt points to a banner hanging above their heads. The sign, which reads, “EQUAL RIGHTS TO ALL SPECIAL PRIVILEGES TO NONE,” points to the reasoning behind the Economy Act of 1933 and FDR’s populist policies. During the Great Depression most US citizens were in need during those difficult economic times, and while FDR recognized the nation’s responsibility to those who served their country, he also stressed their equality with other citizens (The Dallas Morning News “Roosevelt at Chicago”). Drawing on that ideology, Knott suggested Roosevelts’ similarity to another populist president, Andrew Jackson. The quote boldly displayed and pointed to by President Roosevelt reads, “EQUAL RIGHTS TO ALL SPECIAL PRIVILEGES TO NONE.” It is a famous populist slogan widely attributed to Andrew Jackson.

Jacksonian Democrats not only believed in maintaining a strong Federal Union but also in following the conviction that “no one man has any more intrinsic right to official station than another,” as well as in maintaining the assurance that “the already wealthy and favored classes would not enrich themselves further by commandeering, enlarging, and then plundering public institutions” (History.com Staff “Jacksonian Democracy” and Gale “Andrew Jackson”). By cutting their previous federal funding allowances, the aid given to veterans and the banking system was equalized by FDR when compared to other assistance programs. His actions were based on his affirmation of equal treatment of citizens and are directly and were comparable to Jackson’s views. Because veterans and banks were receiving significantly more aid compared to other institutions and groups, Roosevelt cut their funding, opening more opportunities for other struggling parties to receive monetary assistance, thus equalizing government aid program fairness (Knott “Regardless of Dress”).

“Roosevelt in Chicago,” an editorial that accompanied Knott’s cartoon, spelled out the aforementioned policies regarding veterans and banks alike and described Roosevelt’s take on the need for equalizing aid (re)distribution. The editorial discussed FDR’s emphasis on “the plain duties of citizenship,” another reference to Roosevelt’s Jacksonian-inspired populist agenda for economic recovery. Roosevelt’s New Deal ushered in the dawn of a new American economic era in both its policies and reforms (The Dallas Morning News “Roosevelt at Chicago”).

The Great Depression was a devastating period of American history for all US citizens. As the economy struggled, Roosevelt was not only faced with how to bring prosperity to the nation but also how to treat all social classes under his altering reforms. His actions highlighted the repetition of history and the new takes future leaders are able to implement to adjust for the times.

 

Works Cited

“Andrew Jackson.” Encyclopedia of World Biography, 2nd ed., vol. 8, Gale, 2004, pp. 168-   172. Gale Virtual Reference        Libraryhttp://link.galegroup.com/apps/doc/CX3404703247/GVRL?u=txshracd2598&si    d=GVRL&xid=891df37f. Accessed 3 Apr. 2018.

Elis, Niv. “US Deficit Spending Reached $668 Billion in Fiscal 2017.” The Hill, 9 Oct. 2017, thehill.com/policy/finance/354542-us-deficit-spending-reached-668-billion-in-fiscal-2017.

History.com Staff. “Jacksonian Democracy.” History.com, A&E Television Networks, 2012, www.history.com/topics/jacksonian-democracy.

Hoover, Herbert. “The Gilder Lehrman Institute of American History.” Nat Turner’s Rebellion,1831 | Gilder Lehrman Institute of American History, www.gilderlehrman.org/content/herbert-hoover-great-depression-and-new-deal-1931–1933.

Knott, John. “Regardless of Dress” The Dallas Morning News, 4 Oct. 1933.

Lumen Learning. “Franklin Roosevelt and the New Deal, 1932-1941.” Lumen, Open SUNY Textbooks, courses.lumenlearning.com/suny-ushistory2os2xmaster/chapter/the-first-new- deal/.

Morgan, Iwan. “Deficit Spending.” Encyclopedia of the Great Depression, edited by Robert S. McElvaine, vol. 1, Macmillan Reference USA, 2004, pp. 226-228. Gale Virtual ReferenceLibraryhttp://link.galegroup.com/apps/doc/CX3404500134/GVRL?u=txshracd2598&si=GVRL&xid=6476eefb. Accessed 3 Apr. 2018.

Morgan, Iwan. “Economy Act of 1933.” Encyclopedia of the Great Depression, edited by Robert S. McElvaine, vol. 1, Macmillan Reference USA, 2004, pp. 268-269. Gale Virtual Reference        Libraryhttp://link.galegroup.com/apps/doc/CX3404500154/GVRL?u=txshracd2598&sid=GVRL&xid=b0474e7f. Accessed 3 Apr. 2018.

“Roosevelt at Chicago.” The Dallas Morning News, 4 Oct. 1933.

Special to The New York Times. (1932, Dec 08). Text of the president’s message calling on congress for a curb on spending. New York Times (1923-Current File) Retrieved from   http://ezproxy.lib.utexas.edu/login?url=https://search.proquest.com/docview/99804009?a         ccountid=7118

“The 1930s: Government and Politics: Overview.” American Decades, edited by Judith S. Baughman, et al., vol. 4: 1930-1939, Gale, 2001. Gale Virtual Reference        Libraryhttp://link.galegroup.com/apps/doc/CX3468301167/GVRL?u=txshracd2598&sid=GVRL&xid=87193b62. Accessed 3 Apr. 2018.