Townsend Plan


Proposal that resulted in the Social Security Act after Franklin D. Roosevelt coopted the plan during his 1936 reelection campaign.

In 1933, as the Great Depression continued unabated, Francis E. Townsend of Long Beach, California, a politically active doctor, called for the establishment of the Old Age Revolving Pension. Under his plan every American over the age of 60 years would receive a monthly check from the government in the amount of $200 on the condition that all of the money would be spent every month. The funds would be generated by a 2 percent federal sales tax. This plan, designed to provide income for the aging unemployed population, would open up jobs for younger workers while providing older citizens a means of continued financial support. Promoted across the nation by dynamic promoters like Gerald L. K. Smith (Townsend’s adviser, who named the idea the Townsend Plan), the idea became extremely popular. Franklin D. Roosevelt added it to his platform during his 1936 presidential campaign for a second term, in which he faced the Union Party that Townsend and Smith had helped to found. In 1935, Roosevelt persuaded Congress to pass the Social Security Act.

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