THE DEVELOPMENT OF U.S. SOCIAL POLICIES Lecture for USW 31 Theda Skocpol

Overview of major phases in the development of U.S. social provision; and U.S. in comparative perspective. Next two lectures: Family/Work; Generational Issues (including health care).

What images and ideas do these phrases bring to mind? “Welfare” “Welfare state”

“Welfare state” actually has an ambiguous meaning in the United States. Scholars use this term to refer to the entire pattern of social expenditures in a nation -- and Christopher Howard and Jacob Hacker include indirect “tax expenditures” and “tax credits” in their portrayals of the overall U.S. welfare state. But in American popular discourse, “welfare” refers to programs targeted on the poor alone. Such programs have not been very well supported in U.S. democracy, and the term “welfare” often has a negative connotation -- in contrast to “social security” which has a positive ring for most Americans.

MAJOR DIRECT SOCIAL EXPENDITURES IN U.S. DEMOCRACY  Public schooling: primary and secondary schools spread across localities and states from the in the early 19 th century.  Programs for mothers and children: mothers pensions, workplace regulations spread across states in 1910s, and the federal government created the Children’s Bureau and the 1921 Sheppard- Towner Act.  “Social Security” old-age insurance: launched in 1935 as part of the Act with that name. Expanded in steps 1939 to 1956 to cover survivors, virtually all employees, and include disability benefits. Medicare added in  GI Bill of 1944: offered WWII veterans generous education, family, and employment benefits, and loans for homes, farms and businesses.

THE POLITICAL FORMULA FOR GENEROUS AND SUSTAINED SOCIAL SPENDING IN THE UNITED STATES  Benefits for service: successful programs reward or prepare individuals for service to the nation/community.  Broad constituencies: successful programs include the middle class along with the poor.  Partnerships between government and citizens’ associations: grow up to support and expand inclusive programs.  Reliable public revenues: the most successful programs have access to dedicated taxes or growing national taxes.

U.S. Social Programs in the Late 20 th Century The formula for sustainable social provision fell apart after the 1960s racialized conflicts over affirmative action and welfare for the poor generational gaps and the missing middle advocacy groups targeted children or the elderly, and broad citizens’ associations declined resistance to taxation grew, and indirect tax subsidies became the major route for expanded social provision

Irv Garfinkel, Lee Rainwater, & Timothy Smeeding Inequality at Harvard 2/14/11

Widely Believed Half Truths/Nonsense –The welfare state is a drag on productivity. –The US has an unusually small welfare state. –The US always has been a welfare state laggard. The Truth –The socialized programs of welfare states complement capitalism and enrich nations. –The US welfare state is quite large. –For most of the 19 th & 20 th Century, US was a leader in education, the most productive part of the welfare state. We no longer lead.

Gross Size of Welfare States in 1900 (with and without education) Source: Lindert, P. (2005) Growing public: Social spending and economic growth since the eighteenth century.

Social Welfare Transfers as a Percent of GDP (with and without employer-provided benefits) Source: OECD, FY2001

Social Welfare Transfers in US $ Per Person (with and without employer-provided benefits)

Many direct social expenditures in the USA were originally authorized by the the SOCIAL SECURITY ACT of 1935, which had three major parts: National system of Old Age Insurance (“Social Security”) funded by payroll tax on employers and employees. Federally required, yet state-administered unemployment insurance programs, funded by taxes on employers. States determined taxes and benefit rules and levels. Federally subsidized, state-determined and administered public assistance (“welfare”) programs for the needy elderly, for the blind, and for very poor children. States could set benefit levels and many rules for eligibility.

Source: Christopher Howard, THE HIDDENWELFARE STATE (1997). Despite the recent expansion of the Earned Income Tax Credit (EITC), which primarily benefits the less-well-off, most “hidden welfare state” tax expenditures go to the privileged. Tax credits and refunds are also harder for the poor to understand and use -- and difficult to use for popular political mobilization.

SSN Briefs on Tax Expenditures Available at Christopher Howard, “Tax Expenditures: What They Are and Who Benefits.” Leonard E. Burman and Marvin M. Phaup, “Could Reducing Tax Expenditures Tame the Federal Debt?” Suzanne Mettler, “Why Americans Can’t See Government – And Why It Matters.”