A Tea Party That Changed History

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As work on the administration's legislative proposal continued into the closing days of 1934, Frances Perkins and her team were beginning to grow worried. This was a new area of American law and practice and there were serious constitutional questions about any Social Security scheme. The team was unable to decide on what basis to design the new system, but they knew the wrong choice might doom all hopes for the program. Just then fate lent a hand.

At the time, Harlan F. Stone was an Associate Justice of the Supreme Court (later to be elevated to Chief Justice), and he and his wife often held tea parties on Wednesday afternoons . Although she was not by nature fond of such affairs, Frances Perkins dutifully arrived at 5:45 p.m. one Wednesday afternoon for tea with the Stones and their guests.

At one point in the afternoon Secretary Perkins found herself seated next to Justice Stone, and in their small talk he inquired as to how her work was going. The Secretary freely admitted they were stuck on the Administration's new Social Security bill, and were uncertain on what basis the new program should be founded. Upon hearing this, the Justice looked around to see if anyone was listening, leaned over to her, and putting his hand up to his mouth, whispered, "The taxing power of the Federal Government, my dear; the taxing power is sufficient for everything you want and need." The Secretary excitedly returned to her staff and announced she had made up her mind, they would base the new program on the government's power to tax. (She never told them how she had finally come to this insight.)

When the new law was enacted, based on the power to levy payroll taxes, it was immediately challenged in the courts. And Justice Stone's provident prediction bore out. On May 24, 1937 the Supreme Court ruled 7-2 that the new Social Security program, based on the government's broad power to tax, was fully constitutional.

So if a Supreme Court Justice invites you to tea, you should go. It just may be an invitation to change the course of history!

(Frances Perkins recounted this story in a speech to SSA employees on October 23, 1962. The speech was subsequently published by SSA in booklet form, as "The Roots of Social Security," SSA Publication EP 17, 1963. Now out print, the full text of Mrs. Perkins' speech is available elsewhere on this web site.)

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