Welfare System in the United States

History of Welfare: Development of the Modern U.S. Welfare System

Introduction to Welfare System

The modern U.S. welfare system dates to the Great Depression of the 1930s. During the worst parts of the depression, about one-fourth of the labor force was without work. More than two-thirds of all households would have been considered poor by today’s standards (adjusted for inflationary changes in the value of the U.S. dollar). With a majority of the able-bodied adult population experiencing severe financial distress firsthand, Americans no longer could view poverty simply as a personal failing.

U.S. president Franklin D. Roosevelt led a social and economic reform movement as a response to the depression. Part of his New Deal program was the Social Security Act, enacted by Congress in 1935. This act and its 1939 amendments established a number of social welfare programs, each designed to provide support for different segments of the population. Programs included Old-Age and Survivors’ Insurance (OASI) for retired people and their families (to which disability insurance was added in 1954, forming OASDI); Unemployment Compensation for those who lost work temporarily; Aid to Dependent Children (ADC), later known as Aid to Families with Dependent Children (AFDC); and grants to states to provide medical care. In 1946 the government created the Social Security Administration (SSA) to oversee the provisions of the act.

A succession of federal agencies have administered social security programs since the act’s inception. The Federal Security Agency was established in 1939; the Department of Health, Education, and Welfare in 1953; and the Department of Health and Human Services (HHS) in 1980, when the SSA became a separate organization. The government created the Department of Housing and Urban Development (HUD) in 1965. It replaced the former Housing and Home Finance Agency, and provides public housing support for low-income families. The U.S. Department of Labor-created in 1913, predating the Social Security Act-and its Pension and Welfare Benefits Administration manages workers’ benefits programs. Its Employment and Training Administration manages some welfare-to-work programs, as well as job training and placement programs. Other federal government agencies, including the Department of Education, the Department of Agriculture, and the Department of the Treasury, also administer welfare programs.

Funding for welfare programs has significantly increased in recent decades, particularly for working families who remain poor. In 1999, for example, the U.S. government spent $52 billion on a range of supports for low-income working families through tax credits, help with childcare, and other assistance. By contrast, the government spent only $6 billion on comparable programs in 1984, even after accounting for inflation.” (1)

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Notes and References

Information about Welfare System in the Encarta Online Encyclopedia

Welfare System