A Funny Thing Happened on the Road to the Welfare State

Amanda I. Seligman, October 2012

Amanda I. SeligmanIn asserting that “budgets reflect choices” President Obama evoked the now commonplace invocation of the religious left that “budgets are moral documents.” If how we allocate our money reflects what our values are, how we frame our political debates also reveals our basic understanding of what matters. Despite its officially broad focus on “domestic policy,” the first presidential debate of 2012 was all about the economy. Hot-button domestic issues missing from the debate included gay marriage, abortion, immigration, and the environment. The only domestic issue other than the economy that received notable air time was education.

The relentless focus on the economy reflects the triumph of the Keynesian state that assumes an essential role for the federal government in the management of the economy. Despite his repeated assertion that the market is the best filter, Governor Romney joined President Barack Obama under the spell of John Maynard Keynes. Romney spelled out that the goal of generating jobs is to increase the revenue generated by taxes. In response to moderator Jim Lehrer’s direct question about the proper role of regulation, Romney agreed that it is essential. For example, banks require regulation; we do not want people running banks out of their garages.

If the exclusive focus on the economy is one measure of our collective priorities, the structure of the subtopics of the debate also tells a significant tale. The first presidential debate revealed that a funny thing happened on the way to the welfare state. Health care was disentangled from poverty policy. Moderator Jim Lehrer positioned the segment of the debate about health care as within the discussion of the economy but quite separate from the conversation about “entitlements”—the 21st century rhetorical home of poverty policy. Until the Clinton administration, the federal role in health care belonged under the umbrella of welfare policy.

In colonial America, local governments had primary responsibility for caring for their “own” poor. Those on verge of indigence were literally “warned out” of town. Local governments were responsible for the “deserving” among the poor who were unable to care for themselves. Elders, children, and the disabled received care in the homes of fellow citizens who took them in as a source of income. Authorities reimbursed them for the costs. Governor Romney inadvertently echoed this history of the poor caring for the indigent when he slipped and said poor people should take care of each other. In the 19th century, care for those too sick to fend for themselves shifted to the institutional setting of the municipal almshouse. Dorothea Dix was instrumental in getting the states to establish institutions for the mentally ill but failed to persuade President Franklin Pierce that the federal government should do the same.

After the New Deal’s establishment of the role of the federal government in poverty policy, health care went off on a different path in the 1950s. The passage of the Kerr-Mills Act of 1960, which provided assistance for elders who were “medically indigent,” presaged the establishment of Medicare and Medicaid in 1965 as part of President Lyndon Baines Johnson’s Great Society initiative. These two programs bifurcated federally-supported medical care into a generous system for the elderly and a stingy system for the poor but also reflected a new consensus that health care was a need the federal government should address. Left out of the new health care regime were America’s working poor, many of whom lacked private insurance. The inelegantly named principle of “less eligibility” tells us that Americans find it unacceptable when a person who works for a living receives fewer benefits than someone receiving aid. The federal government had to either get rid of Medicaid and Medicare or find a way to draw in the uninsured. The extension of health care to all Americans through the “Obamacare” reform is a transmutation of the ancient tradition that the poor, at least, should receive care. Lehrer’s and the candidates’ treatment of health care separately from poverty underscored how American culture has forgotten the origins of federal health insurance in poverty policy.

My Twitter feed and Facebook friends suggested that Jim Lehrer lost the debate. It seems to me that Franklin Roosevelt won.

Amanda I. Seligman is associate professor of history and urban studies at the University of Wisconsin-Milwaukee. She is the author of Block by Block: Neighborhoods and Public Policy on Chicago’s West Side (Univ. of Chicago Press, 2005) and Is Graduate School Really for You: The Whos, Whats, Hows, and Whys of Pursuing a Master’s or PhD (Johns Hopkins Univ. Press, 2012).