Political leaders point proudly to the number of Americans who have left welfare and to the growing reach of workfare programs. The EITC, for example, lifts some five to six million people out of poverty each year. But another three million are in poor families entirely outside the new system, receiving neither wages nor assistance, and some forty million Americansreceive poverty-level wages.39 National poverty levels have remained stubbornly high over the past fifteen years, and tens of millions of Americans balance precariously just above the poverty line.40 These trends have continued even in the wake of major declines in the welfare rolls, historic increases in the number of poor adults working year-round and full-time, and investments of more than $500 billion in the new workfare strategies.41 Like “body counts” tallied in military conflicts, both the diminishing number of welfare recipients and the rising number of workfare participants are less indicators of progress than they are indictments of the deep structural weaknesses in the U.S. low-wage labor market, and the failure of social policy to address the problem.
Table I.1 Rates of Relative Poverty, Child Poverty, and Poverty Reduction Through Government Policy in Select Wealthy Nations, Late 2000s
Source: Elise Gould and Hilary Wething, “U.S. Poverty Rates Higher, Safety Net Weaker Than in Peer Countries,” Economic Policy Institute, July 24, 2012, Figures C, D, and F.
Note: The United States is a standout among wealthy nations for its high rates of poverty in the population as a whole and among children. These figures represent rates of relative poverty using the common international standard—the percentage of people in households with less than half the median household income. The United States also does less than other wealthy countries to reduce poverty through government policy. The last column indicates the degree to which relative poverty is reduced by taxes and transfer programs; in these twenty-three countries, government policies reduce poverty by an average of 17.1 percentage points.a Ranked highest to lowest.
CHAPTER 1
Democratic Divisions on Work and Welfare
Two eras command attention in the historical development of both the U.S. welfare state and the modern Democratic Party: the New Deal of the 1930s and the Great Society of the 1960s. Both were launched by liberal Democratic presidents backed by sizable congressional majorities, and the social welfare programs and policies they created came to be seen by supporters and detractors alike as among the defining legacies of the party. Yet the Democratic Party of the 1930s and 1960s was not only the party of Franklin D. Roosevelt, John F. Kennedy, Lyndon B. Johnson, and their liberal supporters. It was also the party of Representatives Robert Doughton and Wilbur Mills, Senator Russell Long, and their conservative colleagues from the South.
Southern Democrats held nearly 40 percent of the party’s congressional seats in 1932 (38 percent in the House; 44 percent in the Senate) and more than 35 percent of them in 1968 (36 percent and 33 percent, respectively). Most were more conservative than others in the party, and they shared a distinctive approach to work and welfare. Several occupied some of the most powerful positions in Congress on social and domestic policy in these years. As debates unfolded over the shape and size of public assistance programs for poor families, the role of Southern Democrats in Congress proved decisive. During the 1930s, intraparty conflicts defined both the limits and possibilities of New Deal welfarism in federal policies toward the poor under the Social Security Act. And in the 1960s, Southern leaders would help execute an unmistakable rightward turn in welfare policy, even as scores of new antipoverty initiatives were launched by party leaders in the White House and social welfare spending spiked to new heights.
The origins of New Deal welfarism lay in the crisis of the Great Depression and the response of the incoming Roosevelt administration. The 1935 Social Security Act created both social insurance programs for workers (such as Unemployment Compensation and Social Security) and public assistance programs for discrete categories of poor Americans, including Aid to Dependent Children (ADC) for single-parent families. The new public assistance system was more comprehensive than the patchwork of state and local programs that preceded it. It created an unprecedented new role for the federal government and provided a new entitlement to certain vulnerable groups of poor Americans. Yet New Deal welfarism was constrained at its inception—not only by the limited scope of assistance, but also by an institutional structure that delimited federal authority over public assistance, and by a fractured coalition of political support within the Democratic Party. Even as the programs expanded in the decades that followed, these limitations left New Deal public assistance vulnerable to attacks by later critics, as the first section of this chapter demonstrates.
The turn from New Deal welfarism to modern workfare at the federal level began in the 1960s with a series of political skirmishes over ADC (later renamed Aid to Families with Dependent Children, AFDC). The transformation would, in time, encompass a range of other programs and expand well beyond work requirements for AFDC recipients. As the chapter’s second section explains, it was in these years—on the watch of John Kennedy and Lyndon Johnson, and in the midst of the largest expansion of social welfare programs since the New Deal—that federal cash assistance for poor families began the slow-moving shift to a work-conditioned safety net that would culminate in the 1996 repeal of AFDC and its federal entitlement. Presidents Kennedy and Johnson pursued a series of liberal expansions of AFDC between 1961 and 1967. The strategies they chose backfired, however, creating opportunities for Southern conservatives within their own party to seize the initiative to pursue a workfare agenda.
New Deal Welfarism: A Thin Entitlement
The Great Depression was entering its third year and unemployment levels approached a staggering 33 percent when Franklin Roosevelt assumed office in 1933.1 The attention of the nation and the new administration was trained on prolonged joblessness and the need for immediate relief for the tens of millions facing destitution. Ten weeks after his inauguration, FDR signed into law the Federal Emergency Relief Act, authorizing matching grants to states to ease acute and widespread poverty through the Federal Emergency Relief Administration (FERA). From the outset, both Roosevelt and FERA administrator Harry Hopkins were determined to provide work to the unemployed—rather than relief through direct cash assistance—wherever possible.2 “Direct relief was merely a temporary emergency expedient,” explained FERA assistant administrator Josephine Brown. “It was necessary to keep the unemployed from starving until work and wages in some form could be provided.”3 Public works programs soon emerged as a central component of the response to the Depression, with more than four million workers employed by the Civil Works Administration by January 1934. Federal relief flowed at unprecedented levels as well, reaching more than eleven million people at the beginning of 1934, and more than eighteen million by the fall.4
As the emergency began to subside, the president turned his attention to creating a permanent program of social protections designed to provide Americans with “security against the major hazards and vicissitudes of life.”5 He appointed a high-level Committee on Economic Security (CES) in June 1934 to study and prepare legislative recommendations for a comprehensive program of federal social provision. Their efforts would yield the landmark Social Security Act of 1935, which included both social insurance programs for current and retired workers and public assistance programs for eligible categories of poor Americans. Within the U.S. context, FDR’s vision for economic security was a bold one, and it rested primarily on the promise of social insurance. “The President wanted everybody covered for every contingency in life—‘cradle to grave,’ he called it—under a social insurance system,” said Labor Secretary Frances Perkins, who had been tapped to head the CES.6 Social insurance programs were designed to shield workers from economic hardship when they were unable to earn due to circumstances beyond their control, such as temporary unemployment, illness, or old age.