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Chapter Summary

Katz, Michael (2001). The American Welfare State, Chapter 1 in The Price of Citizenship: Redefining the American Welfare State. New York: Metropolitan Books

Michael Katz delineates the current state of social policy in the United States, focusing on the political and economic trends that limit welfare and its ability to alleviate poverty and inequality. He discusses inaccurate views Americans hold of welfare, the ascension of conservative political theory, the devolution of power to the states, and the increased use of private markets to provide social goods.

Architecture of the American Welfare State

Katz argues that US citizens, blinded by the belief that welfare disproportionally benefits the undeserving poor, fail to recognize the full spectrum of public welfare sources. Katz outlines two main types of welfare provision: 1) public sector and 2) private. Public provision includes a) public assistance (such as Aid to Families with Dependent Children), b) public insurance (such as Social Security and unemployment insurance) (10) and c) taxation, such as the Earned Income Tax Credit. Private sector provision comes from independent (soup kitchens and religious charities) and private providers (employer subsidized health care and pension funds).

Welfare and the Conservative Agenda

Perceptions of public assistance have been shaped by the ascension of political conservatism during the 1970s and 1980s. Business interests opposition was grounded in the argument that the welfare state increased their costs by raising taxes and wages. Concurrently, middle class [white] Americans experienced falling real wages and saw the implementation of desegregation and affirmative action policies. Katz writes, [i]nstead of directing anger at the wealthy and powerful, the fusion of race and taxes deflected the hostility of the hard-pressed lower-and middle-class Americans toward disadvantaged minorities and, in the process, eroded support for the welfare state (19). Demographic and political trends, the growth of the suburbs and the Sunbelt, and the entrance of religious fundamentalists into the political arena helped catapult conservative politicians into office (20). Finally, the creation of conservative think tanks, such as the Heritage Foundation, provided the research to refine and disseminate the conservative agenda.

The conservative ideology put in place during the Reagan Administration brought together three intellectual strands - economic, social and nationalist, which reversed the federal assistance programs, devolved power to the states, and placed more emphasis on private sector delivery of public goods (26). Welfare and public assistance became recast as privilege to be earned. The culmination of this effort came when President Clinton, a Democrat whose election signified that the center of Americas political spectrum had moved to the right, signed the welfare reform act in 1996, vowing to, end welfare as we know it. As Katz writes, The republicans may have lost the battle in the 1992 and 1996 elections, but they won the war (26). Katz, however, argues that the misguided focus of conservative public policy has sought to address the symptoms of our societys problems, rather than its causes. The introductory chapter delineates the current structure of the American welfare state and provides the background knowledge for the critiques of current welfare reforms he presents in the following chapters.