Since I entered graduate school in 1972, the plot of American history has changed from the age of reform to the age of diversity, and that change has influenced the tone of historical writing in many areas such as my chosen fields of social welfare policy and the history of the welfare state. To state the situation in as broad a manner as possible, historians, who once saw themselves as chroniclers of progress who were encouraged by the gradual growth of the welfare state, have become social critics of the programs that lie within that state. It leaves a historian like me who began his career in the age of reform in the position of adjusting to the age of diversity. My recent work, including my latest and probably last academic book—Making Social Welfare Policy: Four Case Studies Since 1950—ponders that adjustment. This short essay represents an attempt to synthesize that work. It emphasizes the importance of critically examining the origins of programs and chronicling how those origins alter their subsequent development. I believe that the administrative structure of programs, which reflects the helter-skelter nature of the political bargaining preceding their passage, deserves more attention than historians have given it in the age of diversity. This essay uses that basic template to examine four landmarks of the American welfare state: the Social Security Act of 1935, the 1956 amendments to that act, which created Social Security Disability Insurance, the 1965 amendments, which initiated Medicare, and the 1996 amendments that attempted to “end welfare as we know it.”Footnote 1
The Social Security Act as Historiographic Battleground
The significance of the Social Security Act of 1935 lies beyond controversy. It is the single most important piece of American social welfare legislation ever passed and the platform for the expansion of the welfare state. As with most pieces of legislation so central to the policy concerns of a particular era, historians have interpreted the Social Security Act differently in the age of diversity and the age of reform. In the age of reform, historians regarded the Act as a pragmatic triumph that, although flawed in its limited reach and its failure to create a universal benefit that put a floor under people’s incomes, nonetheless took some of the hard edges off the labor market. In the age of diversity, historians looking back at the Social Security Act saw a piece of legislation that reinforced the racial and gender norms that pervaded American society at the time and were the source of fundamental inequalities. In general, the view became that ameliorative laws that reformed the economy of the 1930s possessed the inherent flaws of preserving the status quo (families headed by male breadwinners, black incomes that fell below white incomes), rather than advancing the causes of racial or gender equity. This form of equity became the social policy standard in the age of diversity.
Although the new point of view has much to recommend it and puts the historians on the side of the angels, so to speak, I believe that it also tempts historians, eager to be social critics, to apply the standards of one era to another. This practice risks misunderstanding the motivations of past policy actors and, in effect, misinterpreting past policy actions. Inevitably, policymakers live in their own time and place without a clear picture of the future. Chronicling their actions requires the historian to be sensitive to the norms and events of their eras.
The Social Security Act of 1935
Without getting too far in the weeds, I note that in the case of the Social Security Act one approach has been to focus on powerful southern congressmen who chaired the committees with jurisdiction and whose desire to preserve their formal states’ systems of racial segregation informed their policy positions.Footnote 2 In the policy discussions of 1935, that meant favoring states’ rights and allowing state and local, rather than the federal, governments to set policy. But it is also important to remember that the views of southern congressmen on federalism coincided with those of others in different places along the ideological spectrum. For example, President Franklin Roosevelt and his Secretary of Labor, Frances Perkins, also favored laws implemented at the local rather than the national level. That was, in fact, standard practice, not just a weapon for southerners to use against northerners. Most of the programs established by the omnibus Social Security Act relied on federal grants in aid.
To cite another modern criticism of the Social Security Act, historians, examining the legislative history of the Social Security Act, have identified the occupations that were not covered by the old age insurance part of the Act (the part we now call Social Security). They discovered that agricultural workers and domestic workers were excluded. Since these two occupations accounted for a disproportionate percentage of the African-American work force, it appeared that the program systematically excluded blacks. Although it did exclude many black workers—and that is a valid criticism of the Act—this critique misses at least four important aspects of the world as it existed in 1935.
In the first place, industrial and commercial workers, who were intended to be the major beneficiaries of the program, received Social Security coverage regardless of whether they were white or black, men or women. In the second place, the majority of the excluded workers such as farmers were white, not black, and because of the payroll taxes they would have had to pay, few farmers clamored to be included in Social Security. In the third place, just as federal grants in aid were a common social welfare device, so were laws that distinguished between industrial and agricultural workers. In keeping with contemporary styles of public policy, the New Deal attempted to give farmers their own welfare state through such agencies as the Agricultural Adjustment Administration—the agricultural counterpart to the National Recovery Administration—and the Farm Security Administration, with the intentional use of the word “security” to mirror the Social Security Act. In the fourth place, the experts in social policy who wrote the Social Security Act favored the exclusions for reasons related to administrative efficiency.
Another part of the Social Security Act—public assistance or welfare—also received different treatments from historians in the age of reform and age of diversity. Again the southern congressmen became the primary actors. Southern Congressmen wanted to keep the administration of these laws as close to the local level as possible. They recognized that welfare, destined to be implemented before the old age insurance program (Social Security) and, free of the occupational restrictions that applied to Social Security, was actually more important than old age insurance or social security in the short run. The southerners imposed their will on the legislation by making sure that there was no national minimum payment level that would have strapped the financial resources of Mississippi and possibly brought federal mandates not to discriminate against people of color.Footnote 3
It was not, however, as if southern states were free to run amuck and do what they wanted. Federal administrators who oversaw the law did impose standards and administrative practices on the states, such as that welfare needed to be paid in all counties of a given state and that benefits not be awarded in a partisan political manner. Furthermore, the Social Security Act established categories for welfare—the blind, the elderly, dependent children—with which the southern congressmen had little to do but which were very important to the history of welfare in America. When the elderly were the chief welfare recipients in America, as they were between 1935 and 1950, the program was much less controversial than it later would become. The racial and gender concerns over welfare came later in the program’s history and the program’s structure, set in 1935, became an obstacle in addressing modern policy concerns.
Case Study One: Social Security Disability Insurance
Historians tend to focus on the creation of a particular program and pay less attention to its subsequent development. When historians do focus on a program, they tend to lump it with their current historical concerns. In the area of disability, for example, historians have tended to focus on the rise of people with disabilities as civil rights actors rather than drilling down into the details of Social Security Disability Insurance, which is much more important in terms of the amount of money it costs and the number of people it reaches. An influential book in the field bears the title Disability Rights and the American Social Safety Net. In a further example of the current interest in disability and civil rights, historian Felicia Kornbluh has published an important article in the lead American history journal titled “Disability, Antiprofessionalism and Civil Rights.”Footnote 4
Social Security Disability insurance extended the Social Security program so that working age people could retire from the labor force if they could prove to the satisfaction of government authorities that they were unable to work because of a physical or mental impairment. In an indirect way, the law lowered the legal retirement age. The 1956 passage of the law was a near thing: one vote here or there could have changed the outcome. On one side stood Insurance executives and medical doctors who used the promise of rehabilitation as a weapon against the bill. In a world of advancing medical treatments, the process of rehabilitation allowed people with disabilities to be restored to a condition that made them fit for work. On the other side, social workers, labor unions, and federal bureaucrats argued that disability created economic hardships best remedied not by an uncertain rehabilitation process but rather by making cash payments to people with disabilities
Historical contingencies and institutional realities affected the outcome as much or more than these ideological considerations. The very shape of the bill came from the Social Security program. It would, for example, be financed through payroll taxes and award benefits that were similar in form to old-age insurance retirement benefits. It would define disability, in the manner of old age, as an either-or proposition: one was either disabled or not disabled. Although the robust economy at the time made it easier to pass the measure, the divided nature of the government, with Democrats in charge of Congress and Republicans in charge of the White House, made it harder. At a more granular level, a group of southern Democrats on the Finance Committee blocked the bill in committee, greatly complicating the passage of the bill through the Senate. Two almost serendipitous events produced the final outcome: the recent merger of the American Federation of Labor and the Congress of Industrial Organization gave the unions more clout in advocating the legislation and the retirement of Senator Walter George (D-GA) and his decision to make disability insurance his legacy muted some of the opposition to the bill from his fellow southern Democrats.
In the 1956 passage of disability insurance seemingly incidental details—just the sorts of things that close historical study can uncover—and unexamined historical assumptions—disability was premature old age-mattered to the outcome. Explicit political bargains made when the measure was under legislative consideration left the program with an unlikely administrative arrangement that allowed individual states to make disability determinations under contract to the federal government. As the program developed after 1956, some of its attributes, such as limiting benefits to those fifty or older, proved amenable to change—a process that authority Martha Derthick calls “invisible incremental change”—but the program’s basic structure, with states making disability determinations and the federal government paying out the benefits, resisted legislative efforts to change it.Footnote 5
Nonetheless, SSDI remains the most important of all of America’s disability programs whether measured by money, enrollments, or influence. Although it has civil rights implications, such as by defining disability as the inability to work, civil rights, at least as understood as minority rights rather than due process, has very little to do with its creation or subsequent development. Because of the program’s importance, it deserves its own history, one that concentrates on the program itself rather than on a related and significant topic that has caught the historians’ attention.
Case Study Two: Medicare
Medicare presents a classic case of a legislative triumph becoming a contemporary failure in the eyes of many historians. When historians and historically minded social scientists write about the program, they tend to criticize Medicare because it is a central part of a flawed medical system. The initial historical accounts of Medicare had a gee-whiz quality that celebrated the way that Medicare’s passage ended a long impasse over federally supported health care for the nation’s elderly population. By 1984 when Allen Matusow published his influential overview of the 1960s, Medicare, with its rising costs, had become “a ruinous accommodation between reformers and vested interests.”Footnote 6 As Christy Ford Chapin has pointed out, it relied on an insurance model that failed to provide “patients with integrated medical care in one location” and led to incorrect diagnoses because of its fragmented nature. Furthermore, “it has become almost impossible to dislodge the insurance company model from the health care system.”Footnote 7 In a similar manner, historian of medicine Beatrix Hoffman has bemoaned a health system dominated by private interests that “make a great deal of money from health care and have a vested interest in the status quo.”Footnote 8
Although critiquing Medicare makes plenty of sense, it tends to flatten out the arc of Medicare’s history: its fluid nature at its founding in 1965, its expansion to cover people with disabilities and people with end stage renal disease in 1972, the shift from accommodation to regulation in Medicare’s payments to doctors and hospitals in 1982 and 1983, its extension into the realm of prescription drugs in 2003, and its gradual shift from a single payer to a program incorporating the notion of consumer choice. Medicare, in other words, has its own history that can be separated from the more general woes of the American health care system. If for no other reasons than the size of the program and its influence over American medicine, that story deserves to be told.
Medicare received extended congressional consideration between 1961 and 1965. The fact that doctors who practiced in every congressional district in America opposed it made it controversial and hence difficult to pass. Passage required intense political bargaining of the sort that preceded passage of disability insurance in 1956. Proponents of the bill confronted opponents who emphasized that the elderly should not have Medicare foisted upon them and who thought that general revenues might be a better way of financing health insurance than the Social Security payroll taxes. As always, the details of the law remained fluid right up to the moment of congressional passage in the summer of 1965, despite a huge Democratic congressional majority after the 1964 election.
The institutional structures in the final bill influenced the program’s future development. The first part of the new law, or Part A in the Washington parlance, initiated a program that paid the hospital bills of people over sixty-five. Political bargaining that preceded the enactment of the law added Part B. It covered doctors’ bills and featured voluntary enrollment, premiums that users were required to pay, and general revenue financing to make up the difference between the money collected through the premiums and the actual cost of the program. Subsequent developments featured invisible incremental change, and in 1972 the program expanded to cover people with disabilities and, for reasons that only historians can explain, people with end stage renal disease. As in disability insurance, the basic structures, which in the case of Medicare were Parts A and B, remained in place.
The Part A trust fund, another program feature that originated in the course of 1965 political legislative bargaining, created a measure of the program’s solvency from year to year by measuring the program’s intake from payroll taxes and subtracting the program’s expenditures, mainly reimbursements to hospitals. As costs rose beyond the expectations of the actuaries in the Social Security Administration, the fear arose that the Part A trust fund might go bankrupt and be unable to meet its obligations. Efforts to reduce costs ran into the structural barriers that stemmed from the way in which the 1965 legislation provided for the reimbursement of hospitals. Policymakers tried to adjust those reimbursements in ways that lowered program costs without reducing benefits. “Diagnosis related groups,” which set limits on how much a hospital could be reimbursed for a particular patient stay, became part of Medicare, the product not so much of conventional politics as discussions by experts, usually economists or statisticians, conducted well within the policy process.
In the end, legislators realized that the desired changes they sought to make in Medicare as the program became more expensive could not be made by modifying Parts A and B but rather required a new Part C, enacted in 1997 during the presidency of Bill Clinton. Part C, called at various times Medicare + Choice and Medicare Advantage, offered recipients the voluntary choice of plans that used the techniques of managed care to contain expenses. The prosperity of the 1990s and early years of the twenty-first century combined with the political ambitions of President George W. Bush to put a Republican stamp on the Medicare program led to still another program within Medicare, labeled Part D, to cover the costs of prescription drugs. Part D operated in a different way than Parts A and B. Private pharmaceutical companies sold plans to Medicare beneficiaries that were subsidized and lightly supervised by the federal government.
The expansion of Medicare therefore differed from the expansion of disability insurance. In echoes of policymaking in the age of reform, disability insurance simply incorporated new groups into the program. Medicare also added new programs and put them on top of the existing programs. Parts C and D reflected changes in the conventional wisdom to permit private insurers and drug companies to become agents of the federal government in the provision of social services. Passed in the age of Newt Gingrich, these reforms demonstrated that welfare state expansions could come from a conservative direction as well as a liberal one.
Contemporary liberals and conservatives lived in the age of diversity but interpreted its norms differently. For liberals the term meant the end of racial and gender discrimination to create a more inclusive society. For conservatives the term concerned the freedom of consumers to purchase the social services they desired and the right of private companies to participate in the welfare state.
Case Study Three: Temporary Aid to Needy Families
As one might expect, academics who write about the history of welfare tend to emphasize its racial and gender aspects, and they have produced a raft of studies, some them quite brilliant and nearly all of them informative. One of the more suggestive is Martin Gilens’s book Why Americans Hate Welfare. Footnote 9
But they did not always hate welfare. Aid to Families of Dependent Children (AFDC) started as a relatively minor part of America’s state that generated far less controversy than did the old-age insurance program. The program alleviated the financial stress of widows raising children and enabled them to stay at home and care for their children. The beneficiaries of the program passed the bar of the deserving poor with ease. Over time, however, the situation changed because of the way social welfare programs interacted with one another. Because of the welfare categories written into the 1935 Social Security Act, the AFDC program served dependent children and their mothers. Political dynamics permitted the creation of new categories, such as aid to the permanently disabled in 1950, but not the elimination of the original categories. As a result, old programs had to cope with new social conditions—a common feature of social welfare policy-- such as the mass entrance of women into the labor force and a falling marriage rate that raised the number of “illegitimate” children. Because Social Security (old age, survivors and disability insurance) soon served as the main social welfare benefit for widows with dependent children as a result of amendments passed in 1939 and 1950, AFDC became America’s residual income maintenance program for families with children who failed to qualify for Social Security.
As a consequence of this change, AFDC’s beneficiaries—children living in single-parent families—became stigmatized and lost many of their congressional defenders, a process reinforced by the entrance of many black and Hispanic families to the rolls. Although policymakers tried to change the program’s identity from a means of providing a safe haven for dependent children to a way of moving welfare mothers into the labor force, the program’s basic structure that, for example, penalized welfare recipients for working, made that a difficult objective to achieve. Instead AFDC remained in place until 1996, when a conservative consensus reached critical mass and the window for fundamental reform reopened.
The resulting legislative process featured the usual twists and turns as President Bill Clinton and Speaker of the House Newt Gingrich bargained over the terms of the law. As always, the contents of the law remained fluid until Congress locked those terms into place with the final passage of the law. The new law abolished the old AFDC program and replaced it with something called Temporary Aid to Needy Families (TANF). The name of the new program reinforced the notion that people could receive its benefits only on a temporary, time-limited basis, and only the truly needy need apply.
Although the new program inherited its basic structure from the old program, it represented a new administrative arrangement. In the new program, the federal government made what were called block grants to the states. Block grants consolidated a group of previously separate grants into a single grant with a unitary purpose, and block grants came in limited amounts. In other words, a state received a certain amount of money and no more at the same time that it received more discretionary power to spend the money as it wished. In the policy parlance, the block grants ended the practice of making AFDC an entitlement in which anyone who qualified received a welfare payment.
Conclusion
In what might be the single most important act of the Gingrich era, Congress abolished the AFDC program and replaced it with something new or at least different. The other two programs retained their basic structures through different policy regimes. All three of the programs encountered operational problems and faced criticism that they reflected the past and failed to solve the problems of the present. The responses to these criticisms differed across the programs. Policymakers added new laws, such as the Americans with Disabilities Act of 1990, in order to reach modern objectives but left disability insurance in place, ensuring that retirement rather than rehabilitation or the enforcement of civil rights laws would be America’s main response to the “problem” of disability. Responding to criticisms of Medicare, policymakers created new programs to accomplish new purposes such as expanding the choices available to Medicare recipients and bringing prescription drugs into the program but left the 1965 program, or as it became known, traditional Medicare, largely intact. House Speaker Newt Gingrich put AFDC out of existence but failed to convince policymakers to “modernize” the other two programs by replacing them with something new.
To cast my argument in broader terms, one might start with the proposition that all programs reflect the conventional wisdom of the era of their founding. In a sense, that means that all social-welfare laws quickly become memos from the past. At the same time, however, all programs reflect the serendipitous events that arise in the legislative process. Once put in place, all programs operate through “baked in” institutional structures that are inherited from previous laws. Disability insurance and Medicare utilized the payroll tax collection system of the Social Security program. Welfare reform needed to take into account that the states already ran their Aid to Families with Dependent Children programs.
The origins of a program launch it on a path that is guided by its original structure. At the same time, each of the programs eventually endures crises that put the program under stress and, depending on the magnitude of the stress, induce change. Examples of problems that a program might encounter include changes in the conventional wisdom, as in the fundamental reorientation of AFDC from a humanitarian program to a manpower program for single mothers. The institutional structure of a program might either create administrative problems as the program grows or it might seem so anachronistic that it requires substantial repair to respond to modern conditions. External forces such as the state of the economy (a recession makes it hard to fund Medicare or disability insurance) or demographic pressures (the birth rate declines below expectations or the immigration rate increases) might also reopen the legislative process and create a new path for the program. The clearest example of that among the three case studies is what happened to the AFDC program in the Clinton–Gingrich era.
Most of the historical literature about each of these programs allows historians to play the role of social critics. Disability insurance unfairly equates a physical handicap and the ability to work. Medicare perpetuates the mistakes of an inefficient, inequitable, and needlessly expensive medical system. Temporary Aid to Needy Families places unfair burdens on African Americans and single mothers who live in the inner cities. In the role of social critic, historians illuminate much about what is wrong with US social policy and even, although somewhat cautiously, indicate ways it could be improved. In doing so, historians risk making the mistake of imposing the present on the past and misunderstanding the forces that produced the program in the first place and guided its subsequent development.
My work suggests another lens for the history of social policy: to concentrate on the administrative structure of important social programs and to chronicle the politics that those structures make. That approach might help historians to make sense of social welfare policies that remain a jumble of old and new programs, each of which reflects the conventional wisdom at the time of its passage. Even in this present age of diversity, this approach might illuminate what the age of reform has left behind.
