Retreat of the Welfare State?

Pete Souza / White House

In two excellent posts, Elias Isquith at his blog, and Ned Resnikoff at MSNBC argue that the broader welfare state—and not just entitlements—is in a state of retreat, and that this has been helped along by liberals in and outside of Washington, who have accepted austerity as a necessary objective. Isquith notes that “liberals are buying into what is fundamentally conservative framing—that we’re already spending as much as we reasonably can, that the government can do no more.” And, echoing that point, Resnikoff writes that “all the political momentum seems to be favoring maintaining our meager welfare state its current size—at best.”

While both observations are true, I’m not sure that they’re framed in the right way. Yes, there’s been real retrenchment in the welfare state over the last two years, but how much of that is a product of liberal rhetoric and choices, and how much of it is the logical consequence of an election cycle where radically anti-government conservatives took control of the House of Representatives?

Put another way, if Democrats had retained control of the House in 2010, would we have seen government pull back on things like product safety or environmental regulation? Likewise, had they somehow gained control of the House in 2012, does Isquith or Resnikoff believe the federal government would be as committed to austerity as it currently is?

I have my doubts, in large part because the first two years of the Obama administration are a good case study of what happens when Democrats have control of the federal government—they try to expand it. In those two years, Democrats greatly expanded the welfare state with a new, quasi-universal health-care program, funneled hundreds of billions of dollars to infrastructure and clean energy research, and implemented a host of new financial regulations. There’s a reason Time correspondent Michael Grunwald called his book on the stimulus The New New Deal—in both size and scope, the activity of Obama and the 111th Congress resembled that of FDR’s first term.

None of this is to say that things are perfect! They aren’t. Even with the Affordable Care Act, the welfare state is still too small and too stingy to provide true economic security for ordinary Americans. Moreover, there have been real cuts to broad functions of government—like regulation of our air and water—to say nothing of cuts to the social safety net, which have been pushed by House Republicans for the last two years.

But I can’t sign on to claims about the wholesale retrenchment of the welfare state—when you consider health-care reform, it’s just not clear its taken a large step backwards. What’s more, when you consider the extent to which the Obama administration has used deals as a way to get further economic aid, it’s an open question as to whether Obama is as committed to spending cuts as he lets on. For my part, at least, I still need more information to make that judgment.