But older anti-government institutions still need to realise that the mistakes of the 1960s are not being repeated

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Last week’s fight among US conservatives over the meaning of “welfare” exposed a deepening rift between the movement’s older anti-government institutions and a newer generation more interested in using public policy for good.

Descriptively, “welfare” can mean any government effort to provide people with resources. But in American politics the term’s connotations are traditionally more pejorative, usually referring to the framework of anti-poverty programmes established in the 1960s which provided benefits especially to single mothers who did not work, but withdrew them if the women began to earn their own income or got married. “Welfare reform” in 1996 ended these perverse incentives and many conservatives consider it the era’s signal policy achievement.

What to make, then, of a policy that provides resources to lower-income households, but does so only if they are working to earn income of their own, and rewards that work by providing more resources as earned income increases? Is it “welfare” or, said with disdain, welfare? A proposed expansion of the Child Tax Credit has put that question squarely on the table.

The CTC first appeared in 1994 as part of congressman Newt Gingrich’s famous “contract with America.” It became law in 1997 and has since grown in value from $500 to $2,000 per child. Critically, the initial credit could only be applied against taxes owed, meaning its full value could only be claimed by a family earning a sufficient income, which would in turn trigger sufficient taxes to be offset. The lowest-income families who would most benefit from assistance were left out.

Continue reading at the Financial Times
Oren Cass
Oren Cass is the executive director at American Compass.
@oren_cass
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