The US built a European-style welfare state. It’s largely over.
By Claire Cain Miller and Alicia Parlapiano
In the early, panicked days of the pandemic, the U.S. government did something that was previously unimaginable. It transformed itself, within weeks, into something akin to a European-style welfare state.
Congress rapidly fortified the social safety net, making it much stronger than at any point. It made policies such as Medicaid and food stamps more generous. It created new federal benefits including paid sick and caregiving leave, and free school lunches. And it made some pandemic benefits, such as stimulus checks and child allowances, nearly universal. The government is estimated to have spent about $5 trillion helping individuals and businesses since March 2020.
Since then, most of it has been disbanded. Last week, Medicaid began unenrolling an estimated 15 million Americans who were guaranteed coverage during the pandemic, one of the longest-lasting benefits. The previous week marked the end of higher SNAP benefits, or food stamps; most recipients will now receive between $95 and $250 less each month. A few policies — including rental assistance, child care grants and more generous health insurance credits — will not expire until next year or the year after. But for the most part, the pandemic-era American welfare state is over.
This was by design: The policies were created as a response to the crisis and wound down as the acute phase of the pandemic ended and the economy reopened. Efforts to extend certain programs — or to formally create a more generous safety net, as President Joe Biden laid out in his large social spending bill — have failed.
There has been little political will to make policies permanent because they did not emerge from a deeper shift in how Americans view the role of government or the rights of citizens, said Sheri Berman, a political science professor at Barnard College who has studied social democracies.
“The set of goals — protecting people from the downsides of unemployment, helping families with children and ensuring access to health care — are totally accepted in Western Europe,” she said. During the pandemic, she added, “we looked more like that, in our own patchwork way.”
“But people did not have an ideological conversion, a new view of what American citizenship could be,” she said. Rather, it was a recognition that during the crisis, “without these things, the entire system could go under.”
Yet the country’s brief flirtation with a much more generous safety net left its mark, researchers said.
Last month, North Carolina opted to expand Medicaid, following other states that had reversed their opposition since 2020. Some Republicans have joined Democrats in proposing policies such as a child tax credit or paid family leave. A few of the new benefits, originally temporary, have become lasting, including the option for states to extend Medicaid for 12 months postpartum; an increase in the maximum SNAP allotment; and summer grocery money for school-age children who qualify for free or reduced-price lunch during the school year.
None of these represent big, structural change, the way that other large-scale crises have reordered societies throughout history. But they suggest that pandemic policies may have made way for incremental changes in the role of government in supporting people during hard times, Berman said, by showing what is possible.
“I’m not making the argument that we have a budding Western European welfare state, but I also don’t think we’ve gone entirely backward on some of these issues,” she said. “And I’d expect in the next election for a lot of these issues to be more prominent.”
The United States has historically been opposed to the large government programs and high tax rates seen in much of Europe. As a result, it is unusual among its peers in not providing universal health care, entitlements for children and generous cash assistance to the poor, said Robert A. Moffitt, an economics professor at Johns Hopkins. The benefits it does provide are narrower, vary by state and have more restrictions on who qualifies.
Political polarization and congressional gridlock have made a permanent expansion of social benefits more difficult. So has the current economic climate, with high inflation and interest rates. While Republicans argue that the increases in government spending during the pandemic fueled inflation, people in the Biden administration have countered that other factors have played a bigger role, including the oil shock from Russia’s invasion of Ukraine, and pandemic-related challenges such as supply chain tangles and shifts in what Americans have wanted to buy.
“The politics of trying to make these programs permanent just isn’t there today, not to mention budget constraints,” said Samuel Hammond, an economist at the Lincoln Network, a right-leaning think tank. “The macro environment has turned in a way that has sort of reaffirmed the fiscal conservatives.”
At the same time, there is a growing divide on the right between conservatives who want to limit government spending and encourage work and social conservatives who are open to spending on families. This has hastened as the party has gained working-class supporters, and as some Republicans have emphasized family policies in the wake of the Supreme Court ruling that ended the national right to abortion.
Unemployment insurance is one area in which some experts would like to see changes become permanent. More than 15 million people who are not typically covered — including part-time workers, independent contractors and the self-employed — were covered for a year and a half.
Another is support for families with young children. The expanded child tax credit — given monthly for half a year so families did not have to wait until tax time — reduced child poverty by one-third.
A third is health insurance access. A policy decreasing health insurance prices for people who buy their own coverage and making it free for the lowest earners is one reason the uninsured rate has dropped to a record low of 8%, and Congress has extended the subsidies through 2025.
“We allow working conditions, and have a set of public benefits around people, that allow an enormous amount of instability and insecurity,” said Sharon Parrott, president of the Center on Budget and Policy Priorities, a left-leaning think tank. “What we did show is we actually can help people stabilize their situations quite a bit if we’re willing to provide assistance.”