fiscal federalism quiz #3

What evidence does Skocpol use to argue that America in the late 19th century was less a “laggard welfare state” than a peculiar one? How does she argue the US was not so far behind?

• the size and generosity of Civil War pensions

• women’s groups that gave rise to a “maternalistic” welfare state

• points out that the federal agencies administering veterans’ benefits were quite large and professional 

Skocpol and Civil War Pensions

• the number of people receiving Civil War pension benefits exceeded those of Britain in 1913

• enrollment exploded after the 1879 Arrears Act, and again after the 1890 Dependent Pension Act

• were an extremely successful case of federal social policy expansion

• signaled the potential for an “honorable, cross-class, cross-racial, social policy to flourish in America”

• party competition and patronage politics drove the expansion of the system

Skocpol and the “Maternalist Welfare State”

• demands for political representation expressed through discourse about making world safe for good “motherhood”

• pushed for mothers’ pensions, child welfare programs, public health reforms

• quite successful in passing state-level laws to reduce women’s working hours since women were considered to be “wards of the state”

• 39 states pass “Mothers’ Aid” pension programs by 1920

David Brian Robertson attributes the failure of the progressives to enact national social welfare policies between the 1880s and 1930 to what forces?

• American federalism has created a constitutionally fragmented political authority; no unified federal authority to implement cohesive policy; instead, thousands of local governments and 50 different states would have to come together to coordinate programs

• Congress also fragmented into several committees working with government bureaucracies and private businesses to achieve narrow policy goals

• craft unionism: skilled workers in specific trades skeptical of broad welfare that might reduce their bargaining power

• interstate competition: states competed for business by keeping labor costs low with low wages, weak safety laws, no mandatory insurance

• universal white male suffrage: parties forced to appeal to broad electorate, producing patronage politics

• racial and gender divisions inhibit the formation of alliances

Where and on what issues does Robertson say Progressives had success?

• succeeded mainly at state and local levels where federalism allowed reforms by giving states autonomy

• progressives champion innovative state legislation and push for its horizontal and vertical diffusion

• professionalized government services like data collection, budget formation, reporting; also more use of statistics

• create new administrative units for specific social problems such as the US Children’s Health Bureau (1912), the Department of Labor (1913)

How does David Brian Robertson characterize the similarities and differences in perspectives on labor market policies of John R Commons and William Beveridge?

• both are economists/lawyers who become dominant figures in the social welfare policies of their countries, particularly applied to labor market problems

• both characterized by pragmatists who adapted recommendations to respective political systems

• believed labor markets were unstable and required reform (rejecting laissez-faire economics)

To what, does David Brian Robertson ultimately attribute the major differences in Beveridge’s and Commons’ reform strategies?

• Commons: national wealth, individualistic political culture, fragmented government steered him away from more unified system

• Beveridge: being British enabled him to push for more comprehensive, centralized, income-maintenance system

What does David Brian Robertson say about the role of “experience rating” in the American system of unemployment insurance?

• Commons pushed for differential taxation and experience rating

• experience rating: adjusts policyholder’s premium based on actual past loss experience compared to expected losses of average business in same industry

• dangerous firms made to pay more, encouraging employers to work with employees to lower accident levels and leave space for this to be done experimentally across firms and industries

Arrears Act of 1879

• enabled Civil War veterans to receive benefits from the date of their discharge (or death, for dependents) rather than from date application was approved

• i.e., veterans and their dependents received “back benefits”15 years after the war

• new claims rise more than five times, from 1600 to 10000 a month

Dependent Pension Act of 1890

• expands the Civil War pension system 25 years post-war

• granted pensions to Union Army veterans who were unable to perform manual labor (regardless of whether disability was service-related)

• only eligibility requirement was having served 90+ days w/ honorable discharge

• also provided pensions for widows, minor children, and dependent parents

• Republicans link a “treasury overflowing with tariff revenues” to an explicit effort to solidify their base 

social security/old age insurance

• is federally financed and administered

• centralization makes it more inclusive since eligibility requirements and benefit levels are uniform

• logic of long-term insurance leads to expansion since you want to increase the number of taxpayers paying into the system

• initially excluded agricultural and domestic workers due to perceived administrative difficulty of collecting payroll taxes from these jobs types plus political pandering to Southern Democrats (they were later brought in in 1954 over Southern opposition)

aid to families with dependent children

unemployment insurance

• federal govt. charges employers a federal unemployment tax, with employers getting tax credit (offsets) if they pay into the state’s unemployment insurance program

• states are free to choose their own plans and decide benefit levels, eligibility, duration, how much employers pay, etc.

• none of the initial unemployment insurance programs included agricultural or domestic workers but as Blacks move into more “regular” employment it naturally becomes more inclusive

patronage democracy

maternalist welfare state

settlement houses

Federal Child Labor Act of 1916

Hammer vs. Dagenhart 1918

“pure and simple unionism”

labor market policies

Wisconsin vs Ohio Plan

John R Commons

William Beveridge

What practices does Clemens identify with the America’s ‘Rube Goldberg State.’ How do they differ from our idea of ‘normal states,’ or from ‘normal’ Weberian bureaucracies?

• federal government “delegates authority” to non-governmental actors; state and local over rely on the private provision of public services (heavy use of public-private contracts)

• indirect policy tools like federal matching grants used to encourage subnational levels of government to pursue national goals

• accountability is diffused across many actors, making it hard to identify who is actually accountable for successes or failures—>multiple levels involved, tasks delegated to NGOs, funding comes from one source that differs from implementation

• contrast from Weberian bureaucracies that pursue policy goals by implementing uniform rules through a unified chain of command

Why does Clemens’ classification of the American Welfare State as a “Rube Goldberg State” matter?

• citizens misrecognize public services as private ones

• citizen’s don’t understand who is responsible for the outcomes of what services

• nobody understands who should be held accountable for what

• willingness to pay taxes for services becomes fragile

What do Skocpol and Ikenberry say about the origins and influence of ‘welfare capitalism’ on New Deal legislation? Where do they locate the main forces that shaped the New Deal?

• argue welfare capitalists weren’t very involved in shaping New Deal policy; when they are, they want more uniform and nationally implemented policies to level the playing field between “good” and “bad” employers

• emphasize policy fights within FDR’s council on economic security

  • there is consensus on a national social security plan

  • Witte, Perkins, FDR opt for federal tax offset plans for UI and Workers Compensation to preserve state differences in benefit and elgibility requirements

How do Skocpol and Ikenberry explain why America got state- run, federally-assisted programs for unemployment insurance and public assistance, but a fully national program for Social Security?

• FDR and a few other members of his brain trust opted for federal tax offset plans for unemployment insurance and workers compensation

• for social security, there was much more consensus on a national plan and they didn’t believe in any existing state systems that needed to be reformed 

• social security was built around contributory financing to essentially trick people into thinking they are paying for their future benefits through payroll contributions (contributory financing)

Lieberman says that each of the major national welfare programs put in place during the New Deal –Old Age Insurance, Unemployment Insurance, and Public Assistance—initially discriminated against Black Americans. But he then argues that over time these programs developed along different trajectories, with Old Age Insurance (Social Security) becoming inclusionary, public assistance (Welfare/AFDC) becoming a targeted program perceived as being solely for blacks and Unemployment Insurance occupying a median position between the two. What is his argument? How is the argument similar to and different from that of Skocpol and Ikenberry’s?

• OAI: aka social security; nationally administered and funded, initially excluding predominately Black agricultural and domestic workers (on the grounds of administrative feasibility” but eventually evolves into universal program

• UI: state-run and co-financed; initially excludes agricultural and domestic workers but becomes slightly more universal as Blacks move into new occupations but still state run

• ADC: state-run and co-financed; initially excludes Southern Black women and children and evolves into a stigmatized welfare program

• evolved this way because tracking agricultural and domestic income is difficult and politically, without the support of Southern Democrats the New Deal Coalition crumbles

Committee for Economic Security

The “Welfare Capitalists”

Townsend Plan and “Share Our Wealth” Program

Arthur J. Altenmeyer

Charles Houston of the NAACP

Parochial vs National Administration (qua Liberman)

contributory/payroll tax financing

general revenue financing 

Charles Murray and Losing Ground

What does Schulyer say about the distribution of public revenues and expenditures between levels of government in America before 1940?

What does Schulyer say happens to the relationship between a) local and state spending, b) federal and state and local spending after 1940?

What does Schulyer say is driving the growth of state and local revenues after 1940?

In his article “The Sales Tax that Wasn’t, An Actual History and Alternative History,” Zelanak argues that it is perfectly plausible to think that the New Deal could have been financed by a combination of a federal sales tax and a more ‘elite’ income tax, instead of just a ‘mass’ (and progressive) income tax. How does he think the introduction of a federal sales tax, and the use of less elite income tax to finance the American Welfare State would have affected our tax politics once the age ‘easy finance’ came to an end in the mid-1970s?

Lundeen Plan

Suitable Home

NOLEO

mass vs elite income taxation

income tax exemptions

Henry Morgenthau

“victory tax”

1964 Economic Opportunity Act

community action agencies

family assistance plan

revenue sharing

ACIR Advisory Commission on Intergovernmental Relations (1959-1996)

fiscal equalization

block grant

index of relative wealth

iron triangle

creative federalism

picket fence federalism