The Top 10
Middle-Class Acts of Congress
Laws that Helped Our
Bunker | Center for American
(Jan. 19, 2011) As members of Congress ponder President
Barack Obama’s State of the Union address this year, they should reflect on
how, at critical junctures in our nation’s history, Congress made the decision
to strengthen the American middle class, which proved instrumental in the
country’s growth and prosperity.
Previous Congresses passed legislation that increased access
to health care and education, expanded home ownership, protected the savings of
average Americans, and ensured the rights of Americans in the workplace and
The current Congress would be well served by looking at
their predecessors’ record when considering how to strengthen the middle class
in the 21st century.
Homestead Act of 1862
and the Morrill Land-Grant Act of 1862: Together these two acts helped grow
the American middle class, especially in the central and western parts of the
country. The Homestead Act allowed citizens to lay claim to federal lands if
they lived on the land and improved it. Thus, instead of large swaths of the
country being sold off to the highest bidders, creating a region of wealthy
landowners and impoverished tenant-farmers, those lands ended up in the hands
of farmers who underpinned a strong, growing, middle class among the farmers
and in the communities that flourished with them. The Morrill Act created the
land-grant colleges that developed agricultural improvements and created
educational opportunity for a broader cross-section of Americans.
Glass-Steagall Act of
1933: Passed in the wake of the Great Depression, Glass-Steagall, among
other things, created the Federal Deposit Insurance Corporation, the government
agency that insures commercial bank deposits. The FDIC insures that the savings
of average Americans are not lost if a bank fails. This made banking secure and
viable for the middle class and offered a means for maintaining and growing
savings. Although portions of this act have been repealed, the FDIC continues
to fulfill this important role today.
National Housing Act
of 1934: The creation of the Federal Housing Administration helped make the
30-year, fixed-rate mortgage a pillar of the American mortgage market. The
loans allowed middle-class Americans to become homeowners with stable and
Homeownership became a key source of middle-class wealth
creation over the next few decades and the FHA continues to increase
homeownership among Americans.
Social Security Act
of 1935: One of the signature achievements of the New Deal, this act
created Social Security, the unemployment insurance system, and other
assistance programs. An update to the law passed in 1939 added dependent and
survivor benefits to Social Security, and a disability insurance benefit was
added in 1956. These programs created the foundation of the modern American
social safety net. Social Security is the basis of the American retirement
system while unemployment insurance cushions the blow of unemployment as well
as boosting the economy in downtimes. Both of these programs have kept
Americans in the middle class in retirement and between jobs.
Relations Act of 1935 and the Fair Labor Standards Act of 1938: These acts
created many of the workplace protections that modern Americans depend upon.
The NLRA, also known as the Wagner Act, created modern American labor law and
eased the way to union membership and collective bargaining, keys to creating a strong
middle class. The act also established the National Labor Relations Board,
which oversees union elections and adjudicates labor law. The FLSA created
several labor market protections including the minimum wage, overtime
regulations, and restrictions on child labor.
G.I. Bill (the
Servicemen’s Readjustment Act of 1944): After World War II, many returning
veterans were able to attend college and other postsecondary programs thanks to
the G.I. Bill. The program helped veterans receive grants to pay for higher
education, which in turn increased the number of college graduates. Expanding
access to college education simultaneously boosted the competitiveness of the
United States and opened up a path to well paying, middle-class careers to
millions of Americans. A similar benefit was extended to veterans of the Korean
War, the Vietnam War, and the post-9/11 era.
Social Security Act
of 1965: The creation of Medicare and Medicaid expanded health insurance
coverage to elderly, the poor, and the disabled. This was accomplished through
amendments to the Social Security Act and surely ranks as one of the most
important middle-class policies. Assuring that Americans have access to health
insurance in old age and when they fall on hard times has helped bring an
important level of security to the middle class. Medicare and Medicaid also
paved the way for later reforms that increased health insurance coverage.
Civil Rights Act of
1964: The expansion of civil rights for communities of color, religious
minorities, and women allowed them not only to fight back against discrimination
in society writ large, but in the workplace as well. The CRA created the Equal
Employment Opportunity Commission, which insures that no one is discriminated
against on the basis of race, color, religion, national origin, or sex.
Fighting back against discrimination increased the ability of many Americans to
become more fully part of the workforce and the middle class. While this effort
is not yet over, the Civil Rights Act was a major step forward increasing the
size of the middle class. Later laws increased the rights of the elderly and
Higher Education Act
of 1965 (the creation of Pell Grants): Increasing access to a college
education is a critical way of strengthening the middle class. Pell Grants are
need-based financial aid that allows students to pay for postsecondary
education that might otherwise be out of reach. Like the G.I. Bill before it,
expanding the pool of college students, including those who couldn’t afford it
before, has significantly helped the American middle class.
Affordable Care Act
of 2010: The ACA will, when fully in effect, constrain the cost of health
care for middle-class individuals and families, ensuring that it is available
and affordable to all Americans. It will also make it more affordable for a
broad range of businesses to offer health coverage to their employees.
As Congress debates how to build our economy back up, these
laws serve as a reminder that helping the middle class helps everyone and leads
to robust growth for our country.
Nick Bunker is a Special
Assistant with the Economic Policy team at the Center for American Progress.