With a Republican serving as president for the first time in twenty years, the tone in Washington changed. Wealthy businessmen dominated Eisenhower’s cabinet. Defense Secretary Charles Wilson, the former president of General Motors, made the widely publicized statement: “What is good for the country is good for General Motors, and vice versa.” A champion of the business community and a fiscal conservative, Ike worked to scale back government spending, including the military budget. But while right-wing Republicans saw his victory as an invitation to roll back the New Deal, Eisenhower realized that such a course would be disastrous. “Should any political party attempt to abolish Social Security, unemployment insurance, and eliminate labor laws and farm programs,” he declared, “you would not hear of that party again in our political history.” Eisenhower called his domestic agenda Modern Republicanism. It aimed to sever his party’s identification in the minds of many Americans with Herbert Hoover, the Great Depression, and indifference to the economic conditions of ordinary citizens. The core New Deal programs not only remained in place, but expanded. In 1955, millions of agricultural workers became eligible for the first time for Social Security. Nor did Ike reduce the size and scope of government. Despite the use of “free enterprise” as a weapon in the Cold War, the idea of a “mixed economy” in which the government played a major role in planning economic activity was widely accepted throughout the Western world. America’s European allies like Britain and France expanded their welfare states and nationalized key industries like steel, shipbuilding, and transportation (that is, the government bought them from private owners and operated and subsidized them).
“Do you call C-minus catching up with Russia?” Alan Dunn’s cartoon for the New Yorker magazine comments on how Soviet success in launching an artificial earth satellite spurred a focus on improving scientific education in the United States.
The United States had a more limited welfare state than western Europe and left the main pillars of the economy in private hands. But it too used government spending to promote productivity and boost employment. Eisenhower presided over the largest public-works enterprise in American history, the building of the 41,000-mile interstate highway system. As noted in the previous chapter, Cold War arguments—especially the need to provide rapid exit routes from cities in the event of nuclear war—justified this multibillion-dollar project. But automobile manufacturers, oil companies, suburban builders, and construction unions had very practical reasons for supporting highway construction regardless of any Soviet threat. When the Soviets launched Sputnik the first artificial earth satellite, in 1957, the administration responded with the National Defense Education Act, which for the first time offered direct federal funding to higher education.
All in all, rather than dismantling the New Deal, Eisenhower’s modem Republicanism consolidated and legitimized it. By accepting its basic premises, he ensured that its continuation no longer depended on Democratic control of the presidency.