America Is Learning to Reject Socialism, but Love the Welfare State
Some Republicans are taking steps toward Europe’s model of religiously inspired social assistance.
U.S. Sen. Mitt Romney recently released a bold proposal for a cash family benefit that breaks with decades of Republican Party orthodox: markets good, government bad. Romney’s proposal has sparked an extensive debate about how best to design a family benefit, with the Biden administration releasing a rival plan.
The policy world will fight over the merits of these different bills. But together they register a shift in the public debate about the U.S. welfare state. What Romney’s proposal embodies is essentially an effort to remodel the American welfare state—and, by extension, the Republican Party—along the lines of European Christian democracy.
Romney’s “Family Security Act” would provide a monthly cash benefit of $350 for young children and $250 for school-aged children, paid by the Social Security Administration. Families would be eligible for the benefit up to four months before their child’s due date. To create this benefit, Romney proposes eliminating the targeted anti-poverty program Temporary Assistance for Needy Families (TANF); the Earned Income Tax Credit, a means-tested tax credit that varies depending on the size of your family; and the State and Local Tax Deduction, which largely benefits better-off voters in states that regularly vote Democrat.
Children and family benefits are a staple of European welfare states. But while much of what we associate with the European welfare state was built by robust labor movements and allied social democratic parties, family benefits are a legacy of Christian democracy. Germany’s child benefit system was created in the 1950s under Christian Democratic Union head Konrad Adenauer’s leadership, while France’s was shaped by the Christian democratic Popular Republican Movement in the postwar provisional government.
This reflects an underappreciated fact about conservative visions of the free market: The market is often imagined as a meeting place of the heads of families rather than of isolated individuals. When then-British Prime Minister Margaret Thatcher famously declared that “there’s no such thing as society,” she added that “there are individual men and women and there are families.” From Edmund Burke to Joseph Schumpeter, conservative thinkers argued that the family created, for its (male) leader, a sense of responsibility and a longer time horizon, things capitalism needs but cannot itself create. Thus, government financial support for families would complement, not undermine, a market order. Family benefits could establish the family as the key mediating institution between the state and the market, as opposed to socialist demands for politicizing wage labor. Romney’s plan is summoning this conservative attitude.
Yet family benefits have also had more troubling associations with “natalism”—the idea that the government has a responsibility to ensure a certain birth rate. As a result, family benefit proposals were often greeted with caution by more left-wing parties, which were reluctant to focus social policy around expanding the size of families. Where social democrats were in power, the question of family benefits created unease. For example, in Sweden, the debate over family policies was sparked by an influential book Crisis in the Population Question, by Alva Myrdal and Gunnar Myrdal (co-recipient of the first Nobel Prize in economics). Their argument mixed egalitarian concerns about supporting families with an explicit focus on the importance of a high birth rate for economic growth and national defense. Even as the Swedish Social Democratic Party embraced the need to expand material support for the worst-off in society, they worried about treating the family as just another economic variable.
Nonetheless, the overlap between conservative concerns about the family and liberal and socialist worries about poverty marks family policy as an important arena of cross-ideological welfare state building. Could the same be true in the United States? Given the surprisingly warm welcome for Romney’s plan from a variety of ideological corners, and President Joe Biden’s similar plan, there are some early signs pointing to yes. But Romney’s plan or a similar family proposal would not just mark an expansion of social welfare benefits in the United States—it could also mark a more fundamental shift in the structure of the U.S. welfare state.
Why doesn’t the United States have a European-style welfare state? This has been the topic of perennial academic debate going back to Werner Sombart’s 1906 work Why is there No Socialism in the United States? Even compared to its relatively market-oriented “liberal” peers like the United Kingdom, the United States has always stood out for its underdeveloped social safety net. The development of social policies in the United States has always been constrained by a toxic brew of racism, federalism, and constitutional barriers to enacting ambitious political programs. Given the associations of welfare and race, the American poor relief state is miserly and means-tested. Federalism means that programs are run by states with incentives to gut them and divert federal funds elsewhere. Legislative gridlock incentivized politicians to disguise government programs as tax cuts, which are easier to pass.
A federal family benefit would strike at all three pathologies of the U.S. welfare state. Few programs embody the destructive combination of race and federalism as much as TANF. American family policies have always been stigmatized because of the association between welfare and race. The-President Bill Clinton’s 1996 welfare reform bill, which created TANF, was the product of decades of sexist and racist moral panic about “welfare queens”—supposedly undeserving Black mothers taking advantage of hard-working Americans. Clinton’s reform both transferred responsibility for family relief to the states and enabled states to introduce work requirements and other administrative burdens for those seeking assistance. The result is a tattered safety net for America’s poorest citizens.
By eliminating TANF and replacing it with a much more generous program that will also serve middle-class recipients, a monthly cash family benefit would prove more politically sustainable. For the past several decades, the policy consensus in the United States has been that targeted programs avoid what is termed “upward redistribution” toward less needy middle-class recipients. But even if the spending is less targeted, the broader political support can mean the program will be more generous. By creating a broader constituency of beneficiaries, more inclusive programs tend to be more redistributive and more sustainable over the long run.
Most significantly, Romney proposes eliminating a welfare program disguised as a tax cut, turning it into a straightforward cash benefit. This has caused the most backlash from his fellow Republicans. Sens. Marco Rubio and Mike Lee attacked Romney’s idea for turning “tax relief for working parents” into “welfare assistance.” From the perspective of a family’s budget, this is all semantics. But it has political significance. Americans tend to believe they are not receiving any government benefits even when they are, leading to America’s peculiar “submerged state,” in the expert Suzanne Mettler’s phrase. And this is because, as the political scientist Jacob Hacker shows, the U.S. welfare state has been built through backdoor tax rebates rather than direct benefits.
A federal child benefit, paid in cash each month, could do more than just lift millions of Americans out of poverty. It could also more fundamentally shift Americans’ attitudes toward the welfare state. The political scientist Ethan Porter recently gathered a great deal of evidence that Americans can become much less anti-government than commonly thought. Rather than being straightforwardly anti-government, they want to feel like they are getting a good deal. Having a cash benefit hit their bank account every month would encourage such a feeling. Yet Romney’s plan may also be cunning in securing a conservative welfare state equilibrium, where popular government programs are focused on strong families rather than strong unions and workers’ protections.
Along with organizations like the “never Trump” think tank the Niskanen Center, Romney’s proposal reflects the rise of a broader welfare-state-curious tendency on the U.S. right. After a decade of slow growth and rising inequality, American political debate has shifted markedly toward the value of government intervention in the economy and society. Given the divides within the Republican Party, it will be up to a Democratic presidency to embody that shift in new policies. Romney has a knack for crafting the landmark policies of Democratic presidencies, and his family benefit may be no exception.