Political History of Current Welfare State

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Political History of Current Welfare State
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Timeline of Political Spectrum
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Pre-Reagan Social Climate (Late 1960s-1970s)

• White Backlash- opposition to Affirmative Action
  Social Programs (seen as benefiting women and
  people of color).
• Blue Collar workers uneasy about social reform,
  preoccupied with their own economic problems.
• Trade Unions (Traditionally Supporting Democrats)
  weakened by jobs moving overseas and from
  rustbelt to sunbelt.
• Population shift to suburbs.
• Many suburban whites never met a person of other
  color, concerned with own survival in crowded
  labor market, no concern for life in inner city.

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Pre-Reagan Political Scene (Late 1960s-1970s)

• Conservative attack on Big-Spending Liberals
• More young Americans coming of voting age, had
  not lived through Great Depression, less attached
  to social safety nets.
• Republicans targeted young, suburban, sunbelt
  voters. 2 Voting groups gained from Dems by
  Reps (utilizing advanced marketing techniques to
  target literature)
• Northern White Catholics
• Working-Class/ Low-Mid-Class Southern Whites
• (Great Society/Welfare State made their taxes
  increase and tended to disproportionately assist
  people of color)
• Dems social spending and social welfare
• Reps law-abiding white citizens

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Pre-Reagan Conservative Swing (Late 1960s-1970s)

• 1960s Conservative think-tanks (American
  Enterprise Institute/Heritage Foundation)
  established to counter Liberals (Brookings
  Institution and the Urban Institute). Then
• Attacks on Great Society Programs
• Nathan Glazer/Daniel Moynihan
• Rise of the New Religious Political Right (NRPR)-
  Jerry Falwell- issues anti-abortion, censor
  pornographic literature, school prayer, tax
  exemptions for private schools.
• 1980 Reagan Landslide Victory over Jimmy Carter
  (incumbent)

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Reagan Personality

• Idealized self-made men
• Discounted importance of systematic oppression
  (I.e.racism and discrimination, anyone could
  emulate success of whites if they tried,
  anti-Warren Court and anti-Fed Civil Rights,
  leave legislation up to the states-opposed Civil
  Rights acts of 1964,65.)
• Bare-Bones Government, anti-social welfare
  programs for the poor, saw economic inequality as
  an incentive for the poor to improve their
  conditions.

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Keynesian Economics

• Maynard Keynes (Keynesian Economics Dominated
  since the late1930s) use Gvt spending and
  change interest rates to offset recessions and
  inflation.
• In recession Spending interest rates
• In prosperity do the opposite.
• Inadequate to solve Stagflation
  (inflationunemployment)
• Very Consumer/Demand Focussed

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Supply-Side Economics

• Arthur Laffer Kenynes neglected the importance
  of the supply side. No amount of consumer demand
  can cause econ growth if a shortage of investment
  capital exists.
• Need people with large accumulated wealth to
  re-invest it.
• Cut taxes on investments for the rich so that
  they invest in business instead of buying luxury
  items.
• Alleged to solve Stagflation (inflation
  unemployment)
• pools of capital -- create jobs
• inflation decrease as entrepreneurs re-invest in
  technology and new machinery
• Very Producer/Supply Focussed

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Reagan Election (1980-1988)

• Reagan Combined Supply-Side Economics with Major
  Cuts in Social Spending (public distrust of
  Bureaucracy), simplified complex world.
• Defeated Carter (incumbent) 1980, Landslide
• Landslide demoralized Democrat party, Republican
  Majority Senate 1980, Democrat Slim Majority in
  House.
• Reagan able to push his agenda through in his
  first 8 months, confused and divided Democrat
  party, dominated by Reagans popularity.

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Reagans 4-Part Agenda Success(1981)

• 1. OBRA 1981 Omnibus Budget Reconciliation Act
• deep cuts in social programs (folded 57 programs
  into 7 block grants and limited funds), cut
  means-tested programs, steer clear of social
  insurance. CETA cut
• 2. Economic Recovery Tax Act 1981 (Tax Cuts)
• unpatriotic to oppose, largest tax cut since WWII
  end.
• Larger tax cuts to affluent than middle working
  class (income was declining)
• 3. Increase in defense spending
• Increase by 160 over 6 years
• 4. OMB to cut Gvt regulations, EEOC, OSHA, DOL,
  curtailed Affirmative action.

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Reagans Loss of Momentum(1981)

• Recession of 1981-1983, unemployment in double
  digits, harshest on women, nonwhite, teens.
• Boll Weevils (Ds vote with Reagan), Gypsum Moths
  (Rs side with Ds against spending cuts), Ds
  gained house seats.
• Congress resentful of Reagans military spending
  and tax cuts which forced spending cuts.
• Congress resentful of Reagans media pressure on
  them.
• Reagans Spending lead to huge budget deficits
• Ds stifled further spending cuts.

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Reagan Presidency Labor Policy(1980-1988)

• Terminated CETA subsidization of public
  non-profit jobs -- seen as interfering with
  private job market.
• Replaced CETA with JTPA, Job Training Partnership
  Act 1982, Private Industry Councils (PIC) of
  business, agency, and government officials.
  Funds for training contracts, fee for each person
  placed in private industry.
• No day-care provisions
• D victory 1988 Family Support Act (funds to
  states for AFDC training programs and child care)

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George Bush (1988-1991)

• Bush/Quayle defeat Dukakis w majority
• Both chambers of Congress D controlled
• No clear agenda, Preoccupied w foreign policy
• Continued Reagan Themes 1. Military spending
  increases, 2. Resist tax increases, 3.
  Maintenance of Welfare State
• 1990 Budget Battle (deficit reduction)
• 1991 Soviet Union Dissolves, Iraq Conflict,
  Rodney King

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Pre-Clinton Social Changes(1980s-1991)

• 1990s population shift to sunbelt more electoral
  votes now in California South than in North
• By 1992 majority of voters in suburbs
• Ds attempt to re-gain support of many white
  ethnic suburban voters that had shifted right.

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Clinton Rise to Power

• Old Liberals dominated Ds in early 1990s, seen
  as captured by feminists, civil rights groups,
  and organized labor.
• Rise of New Ds -Democratic Leadership Council
  (DLC) Oppose Affirmative Action, liberal welfare
  programs, and eclipse of states policy roles.
• Clinton ill-defined, chameleon, centrist, gained
  support of varying groups Conservative southern
  democrats, northern liberals, DLC.
• Used opinion polls to shape positions

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Clinton Defeats Bush(1992)

• 3rd Party Ross Perot
• Economic Focus, Robert Reich
• Welfare reform
• Clinton wins by narrowest margin since 1968
• Conflicting promises cut debt by 1/2, fund
  social investments (Reich), and stimulate economy.

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Clintons Tough Situation (1991-4)

• Conflicting campaign promises
• Budget Standoff, Gvt close down 43 days
• Pressure to increase spending to before Reagan
• Followed Alan Greenspans suggestion, cut
  deficit, then FED decreases interest rates and
  thus improved economy.

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Rise of Conservative Congress (1980s-1994)

• Since New Deal, many Conservatives favored
  cutting the liberal welfare state and replacing
  it with the conservative opportunity society
• Gingrich plan to take control of congress by
  claiming moral high ground, Like WI Thomas,
  suggested that what actually happens is less
  crucial than how people perceive it. Trained
  Cadre of young conservatives.
• Used Conservative Network to shape public
  opinion, Partisan Conservative Think tanks, TV
  Rush Limbaugh, Charles Murray, Moral Majority --
  Christian Coalition
• 1994 Rs swept congress elections, gained control
  of both houses, (1st time control house in 40
  years, 1955)

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Agenda of Conservative Congress (1980s-1994)

• 1994 Rs swept congress elections, gained control
  of both houses, (1st time control house in 40
  years, 1955)
• Dominated Policy Discourse
• Young conservatives - dismantle great society
  programs that had caused Americas moral
  decline
• Republican Issues Contract with America
• Use Budget to push agenda (balance in 7 years)
• 1.huge spending cuts,
• 2.devolution ( terminate FS, AFDC, and Medicaid
  via change to block grants to states),
• 3. Large tax cuts,
• 4. Large increase in defense spending

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Problems with US Health Care

• A Market-Based System, Physicians and Hospitals
  encouraged to perform costly procedures (as
  opposed to Gvt-Managed Care as in Canada)
• Marketing and Administrative Costs
• No Preventative Care
• Many Uninsured

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Barriers to Reforming US Health Care

• 1. Many Entrenched Interests, Including private
  health insurance companies, physicians,
  hospitals, and pharmaceutical companies
• 2. Americans with coverage may resist reforms
  fearing that their benefits will decrease and
  that costs will increase
• 3. The 40 million uncovered Americans in need of
  insurance are not well organized and seldom vote.

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