How did the New Deal expand the federal government's authority ?

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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The New Deal expanded the authority of the federal government by getting it involved in many more aspects of our economic life.  The programs of the New Deal, along with a change in the Supreme Court’s interpretation of the Constitution, gave the government much more power.

The New Deal programs got the government involved in many more areas of economic life.  It provided jobs for people.  It provided relief for them.  It got the government involved in regulating things like the stock market.  All of these things were actions the government would not have taken before the Depression.

Much of this was made possible by the Supreme Court’s change of opinion as to whether government regulation infringed on liberty.  The Supreme Court came to rule that the government could regulate the economy whenever it was necessary to do such things as protecting the community.  This gave the government much more authority to act as it wished.

By getting the federal government to involve itself in many more areas of the economy, the New Deal expanded its authority greatly.

kipling2448's profile pic

kipling2448 | (Level 3) Educator Emeritus

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The New Deal represented -- excluding the policies associated with the struggle against slavery -- the greatest expansion in the federal government's role in the nation's history.  Franklin Roosevelt came to office amid the height of the Great Depression, and it was his administration's responsibility to conceptualize and implement policies and programs that would lift the country out of the depths of the economic situation into which it had descended. Toward that goal, the Roosevelt Administration, working with an often recalcitrant Congress, pushed through reforms and jobs programs that remain active today, including the establishment of the Federal Deposit Insurance Corporation, which was a direct response to the systemic failure of the nation's banking industry with the concomitant wide-scale loss of savings suffered by American families across the nation.  The FDIC provided -- and continues to do so under the same statutory authorities -- insurance against loss due to bank failure of savings deposits up to a certain amount (currently, $250,000).  In exchange for insuring the deposits of their customers, participating banks are responsible for complying with a series of laws intended to prevent failures.  As such, this vital New Deal program injected the federal government into an industry that, previously, had represented the very essence of free market capitalism.

The New Deal expanded federal government authorities in other ways, as well. By creating entities like the Tennessee Valley Authority, the Social Security Administration (originally the Social Security Board under the aegis of the Federal Security Agency), the Securities and Exchange Commission, the Federal Housing Administration, and more, the New Deal made the role of the federal government ubiquitous in many areas of day-to-day life.  The Social Security Administration in particular represented an enormous expansion of the government's authorities, mandating as it did the establishment of retirement accounts.  The Securities and Exchange Commission policies the securities industry in a way that didn't exist prior to the New Deal, and it remains a powerful body conducting oversight of that huge sector of the American economy today.  In short, the New Deal represented an enormous expansion of the federal government's authorities.


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