Within weeks of that triumphant moment, Roosevelt was ensnared in paralyzing political difficulties. He and his party unquestionably commanded the executive and legislative branches of government, but not the third branch, the judiciary, designedly insulated from the flow and surge of popular political tides. The Supreme Court, made up entirely of pre-Roosevelt appointees, six of them over seventy years of age in 1937, had declared seven major pieces of New Deal legislation unconstitutional by the end of Roosevelt's first term. As he began his second, he determined to confront that judicial obstacle head-on.
On 5 February 1937, Roosevelt proposed to a surprised Congress and nation that he be allowed to appoint one additional justice, up to a maximum of six, for every justice who remained on the Court after reaching the age of seventy. Disingenuously, he tried to justify his proposal with the argument that an overburdened Court needed an expanded membership to handle its caseload—an allegation peremptorily squelched by the respected Chief Justice Charles Evans Hughes.
Roosevelt's "Court-packing plan," as it was soon called, amounted to one of the worst political blunders of his career. Conservatives gagged at the notion of tampering with one of the Republic's sacred institutions. (Though it had been done before, when President Grant had added two justices to the Court, primarily in order to secure a favorable ruling on the Legal Tender Act. Unlike Roosevelt, Grant had taken care to cultivate political support in the Senate before he acted.) Even friends of the New Deal objected to the president's high-handed tactics.
While the battle raged, the Court itself moved to spike Roosevelt's guns. On 29 March 1937 it upheld a Washington State minimum-wage law (in West Coast Hotel v. Parrish ) and two weeks later it declared the Wagner Act constitutional (in National Labor Relations Board v. Jones and Laughlin Steel Corp. ). This shift in judicial sentiment, effected largely by the conversion of Justice Roberts to a more liberal point of view, has been dubbed "the switch in time that saved nine." The president's Court-reform bill died an ignominious death—though eventually Roosevelt appointed eight Supreme Court justices, more than any president save George Washington.
The Court-packing controversy marked the beginning of the end of the New Deal. More than any other single episode, it helped to crystallize a powerfully obstructionist congressional coalition of Republicans and conservative Democrats. In one brief season the president squandered much of the political capital he had so impressively amassed at the polls just a few months earlier.
Other problems soon beset him. Middle-class Americans grew restive at the mushroom growth of industrial unions, especially when daring organizers introduced the "sit-down strike," which amounted to the peaceful seizure of factories by striking workers. The United Auto Workers (UAW) used the sit-down with great effect against General Motors in early 1937. The UAW won recognition as the sole bargaining agent for General Motors employees, but its tactics alienated many nonunionists from the Roosevelt camp.
The worst was yet to come. The economy had improved slowly but perceptibly since 1933, making especially vigorous gains after 1935 under the stimuli of relief expenditures and the one-time-only payment of the budget-busting veterans' bonus, which passed over Roosevelt's veto in January 1936. Incredibly, this display of economic vitality raised the dread specter of inflation in many influential minds, including that of the president. In June 1937, Roosevelt severely curtailed federal spending. Simultaneously, the new Social Security taxes began to bite into paychecks. By late summer these deflationary developments had precipitated an economic downturn at least as bad as that of 1929. Within months, more than 2 million workers lost their jobs.
The "Roosevelt recession" rubbed salt into the president's already smarting political wounds, but it did bring to eventual resolution a long-running debate within his administration about fiscal policy. Orthodox financial advisers had until then dominated the government's inner policymaking circles. As the devil views holy water, so did they look upon the radical notion that the government might deliberately incur deficits as a means of economic stimulus. Though Roosevelt had not yet produced a single balanced budget, that had continued to be his aim. He had tolerated deficits, not sought them, but now he hearkened to the counsel of another group of advisers. Armed with the recently formulated theories of the British economist John Maynard Keynes, the advisers argued that the government should consciously embrace deficit spending in order to bolster consumption and stimulate the economy.
In April 1938, Roosevelt sent to Congress an avowedly stimulatory multibillion-dollar deficit-spending bill. After almost ten years of depression, this was the first purposeful effort to effect economic recovery through the means of countercyclical fiscal policy. For the millions of Americans who for a decade had paid the price of economic collapse, it came assuredly too late; as events were to prove, it was also woefully too little.
It was also among the last gasps of the New Deal. Roosevelt did manage to push through Congress in June 1938 the Fair Labor Standards Act, which defined a federally guaranteed minimum wage and maximum workweek and outlawed child labor. By then the conservative congressional coalition had crystallized, and even members of the president's own party were openly flouting his will. Roosevelt tried to purge conservatives from his party in the 1938 primary season but failed utterly. In the congressional elections in November, Republicans scored their first gains since 1928, picking up eight seats in the Senate and seventy-nine in the House.
With that, the New Deal was effectively ended. It had carried the country, however minimally, through a dark hour. It left a large and lasting legacy of major institutional reforms. Added together, those reforms embodied the various, often contradictory pressures of the decade—particularly those pulsing in the still disparate Democratic party—rather than a coherent expression of any particular ideology. The problem of the depression, the problem that had been midwife and companion to those reforms, was never solved by the New Deal. Roosevelt's principal achievement was political, not economic. He had enabled his countrymen to keep their heads while peoples all about them in the world were losing theirs. He had, against not inconsiderable odds, maintained social peace in a depressed and sometimes desperate America. As the decade of the 1930s drew on, the president's attention turned more and more to preserving peace in the increasingly brutal world beyond America's borders.