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Protean Lure for the Working Poor: Party Competition and the Earned Income Tax Credit*

Published online by Cambridge University Press:  16 December 2008

Christopher Howard
Affiliation:
College of William & Mary

Extract

The development of the Earned Income Tax Credit (EITC) has been extraordinary. What started in 1975 as a minor amendment to a forget-table tax bill became in the 1980s one of the most popular programs in Washington. The national media and policymakers from both parties repeatedly praised the program. The New York Times, for example, hailed the EITC as “a wonderful but little-known anti-poverty weapon…the best means available for lifting the working poor out of poverty.” Republicans embraced the program as a superior alternative to welfare (meaning Aid to Families with Dependent Children), to a higher minimum wage, and to government-run day-care centers. President Bill Clinton made expanding the EITC central to his plans for reforming welfare, increasing the progressivity of the tax system, and improving the economic security of low-wage workers. One would be hard-pressed to find any government program that received such universal acclaim among political elites. By the early 1990s, it had become the policy equivalent of penicillin. Only in the spring of 1995, as congressional Republicans sought to balance the budget within seven years, did some policymakers seriously consider cutting this program.

Type
Politics of Welfare in Two Periods
Copyright
Copyright © Cambridge University Press 1995

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References

1. “A Better Idea on Tax Credits,” New York Times, July 3, 1990, p. A16.

2. Piven, Frances Fox and Cloward, Richard A., Regulating the Poor: The Functions of Public Welfare, updated edition (New York: Vintage, 1993), 457Google Scholar.

3. The figures cited in table 1 somewhat mask the cuts in AFDC. Median monthly AFDC benefits for a family of four declined by approximately 25 percent between 1980 and 1992. Total spending increased slightly because the number of recipients increased, particularly between 1989 and 1992.

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6. One could likewise find evidence of indirect business influence if benefits expanded when unemployment was high and contracted when unemployment was low. One part of Piven and Cloward's argument, as well as Quadagno's, is that social policies are tied to labor markets in such a way as to create a “reserve army of labor” and weaken the bargaining power of workers. Unfortunately for this view, EITC benefits were increased in 1978, 1990, and 1993 when unemployment was far lower than it was during the recession of 1981–83, when no legislative changes occurred and the real value of benefits dropped.

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10. “Tax expenditure” is the formal name for tax breaks or tax loopholes. The open-ended quality of the EITC is distinctive among tax expenditures. Most, like the home mortgage interest and childcare deductions, reward taxpayers for purchasing specific goods. The EITC rewards taxpayers simply for working for wages.

11. There is a sizable literature concerning the impact of electoral politics on social policies at the state level, dating back to V.O. Key, Jr., though political scientists disagree widely about the magnitude and significance of the effects.

12. Analysts disagree over whether the 1980 election signaled a political realignment, a split realignment, or dealignment. This is not the place to evaluate those arguments. I am convinced that party leaders believed at the time that major electoral changes were underway and am persuaded by analysts, like Ladd, who see a profound weakening of party ties: “The New Deal realignment was accompanied by an unambiguous strengthening of Democratic loyalties in the electorate. In contrast the present one finds more and more people splitting their tickets and deciding their votes on grounds related to the candidates and issues in specific elections, rather than going down the line for their party. Party ties count for less today than at any point since a mature party system took shape in the United States in the 1830s.” Ladd, Everett Carll, “The National Election,” Public Opinion 11, no. 5 (01/02 1989): 60Google Scholar. See also Burnham, Walter Dean, “The 1980 Earthquake: Realignment, Reaction, or What?,” in Ferguson, Thomas and Rogers, Joel, eds., The Hidden Election: Politics and Economics in the 1980 Presidential Campaign (Armonk, New York: Pantheon, 1981), 98140Google Scholar.

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19. This is one strategy suggested in Amenta, Edwin, “Making the Most of a Case Study: Theories of the Welfare State and the American Experience,” International Journal of Comparative Sociology 32, no. 1–2 (1991): 172–94CrossRefGoogle Scholar.

20. For various arguments associating divided government with policy gridlock, see Ginsberg and Shefter, Politics by Other Means; Smith, Hedrick, The Power Game: How Washington Works (New York: Random House, 1988)Google Scholar, especially chapter 17; and Sundquist, James, “The Crisis of Competence in our National Government,” Political Science Quarterly 95 (1980): 183208CrossRefGoogle Scholar. For contrary evidence that policymaking is roughly equal during periods of divided and unified government, see Mayhew, David R., Divided We Govern (New Haven: Yale University Press, 1991)Google Scholar.

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23. Concerning FAP, see Brodkin, Evelyn Z., The False Promise of Administrative Reform (Philadelphia: Temple University Press, 1986)Google Scholar, especially 24–8; Burke, Vincent J. and Burke, Vee, Nixon's Good Deed: Welfare Reform (New York: Columbia University Press, 1974)Google Scholar; Moynihan, Daniel P., The Politics of a Guaranteed Income (New York: Random House, 1973)Google Scholar; and “Nixon Administration Welfare Plan Not Enacted,” Congress and the Nation, vol. 3, 1969–1972 (Washington, D.C.: Congressional Quarterly, 1973): 622–27.

24. Concerning the work bonus, see Long's comments in the Congressional Record (September 27, 1972): 32470–7; “Nixon Administration Welfare Plan Not Enacted”; Solomon, The Earned Income Tax Credit (EITC).

25. “Eleven Per Cent Social Security Increase Approved,” Congressional Quarterly Almanac, 1973 (Washington D.C.: Congressional Quarterly, 1974), 579; “Social Services Pro-grams,” Congress and the Nation, vol. 4, 1973–1976 (Washington, D.C.: Congressional Quarterly, 1977): 414–6.

26. A good summary of these reforms can be found in Stewart, Charles H. III, “The Politics of Tax Reform in the 1980s,” in Alesina, Alberto and Carliner, Geoffrey, eds., Politics and Economics in the 1980s (Chicago: University of Chicago Press, 1991), 155–56Google Scholar.

27. “Ways and Means Panel: No Longer Pre-eminent,” Congress and the Nation, vol. 4, 1973–1976 (Washington, D.C.: Congressional Quarterly, 1977), 100.

28. The EITC was extended by the Revenue Adjustment Act of 1975 and the Tax Reform Act of 1976, both times as minor amendments to larger revenue bills. Neither bill altered the basic structure of the tax credit.

29. Rosenbaum, David E., “Carter Asks New Welfare System With Emphasis on Required Work; New York Could Save $527 Million,” New York Times, 08 7, 1977, p. 1Google Scholar.

30. For PBJI, see McKay, David H., Domestic Policy and Ideology: Presidents and the American State, 1964–1987 (Cambridge: Cambridge University Press, 1989)CrossRefGoogle Scholar; Rochefort, David A., “Responding to the New Dependency: The Family Assistance Plan of 1969,” in Critchlow, Donald T. and Hawley, Ellis W., eds., Poverty and Public Policy in Modern America (Chicago: Dorsey, 1989), 291303Google Scholar; U.S. Congress, Welfare Reform Subcommittee, Administration's Welfare Reform Proposal, Part 1: September 20, 1977, Part II: September 29 and 30 and October 12, 1977, and Part III: October 14, 1977; Weil, Gordon L., The Welfare Debate of 1978 (White Plains, New York: Institute for Socioeconomic Studies, 1978)Google Scholar; and “Welfare Reform,” Congress and the Nation, vol. 5, 1977–1980 (Washington, D.C.: Congressional Quarterly, Inc., 1981): 685–8.

31. The PBJI also resembled the welfare reforms enacted in California in the early 1970s under Governor Ronald Reagan.

32. Rosenbaum, “Carter Asks New Welfare System,” p 40.

33. Testimony of Woodworth, Laurence N., Assistant Secretary of the Treasury for Tax Policy, before the U.S. Congress, Welfare Reform Subcommittee, Administration's Welfare Reform Proposal, Part 1: 09 20, 1977, p. 377Google Scholar.

34. Donnelly, Harrison H., “House Votes Sharp Cuts in CETA Jobs Program,” Congressional Quarterly Weekly Report 36, no. 32 (08 8, 1978): 2106–7Google Scholar.

35. This discussion of the EITC and the Revenue Act of 1978 is based on Edward Cowan, “Tax Cut in 1979 of $16.3 Billion Gains in House,” New York Times, July 28, 1978, pp. Al, D2; Gottron, Martha V., ed., Budgeting for America (Washington, D.C.: Congressional Quarterly, Inc., 1982), 180–2Google Scholar; McKay, , Domestic Policy and Ideology; “1978 Tax Cut Bill,” Congress and the Nation, vol. 4, 19771980Google Scholar (Congressional Quarterly, 1981): 238–44; Pierson, John, “Ways and Means Panel Approves $16 Billion Tax Cut; Including Capital-Gains Relief Carter Vowed to Veto,” Wall Street Journal, 07 28, 1978, p. 3Google Scholar; “Senate Panel Raises Personal Tax Exemption,” Wall Street Journal, September 15, 1978, p. 3; U.S. Senate, Finance Committee, Revenue Act of 1978, October 1, 1978; U.S. House of Representatives, conference committee, Revenue Act of 1978, October 15, 1978.

36. According to Gene Steuerle, the changes proposed by Ways and Means stemmed from recommendations made by staff from its Subcommittee on Oversight and from the Treasury Department. Phone interview, September 1991.

37. This theme was first picked up by the media during the 1981–82 recession. News week, for instance, featured the anxious face of a young child on its cover of April 5, 1982. The headline read, “Reagan's America: And the Poor Get Poorer.”

38. Removing low-income workers from the income tax rolls was one of four unconditional requirements Reagan made of any tax reform bill. The other three were reductions in corporate tax rates from 50 to 35 percent, retention of the home mortgage interest deduction, and revenue neutrality. Birnbaum, Jeffrey H. and Murray, Alan S., Showdown at Gucci Gulch (New York: Vintage, 1987), 116–7Google Scholar.

39. Birnbaum and Murray, Showdown at Gucci Gulch; Conlan, Timothy J., Wrightson, Margaret T., and Beam, David, Taxing Choices: The Politics of Tax Reform (Washington, D.C.: Congressional Quarterly, Inc., 1990)Google Scholar.

40. Mitch Daniels quoted in Beam, David R., Conlan, Timothy J., and Wrightson, Margaret T., “Solving the Riddle of Tax Reform: Party Competition and the Politics of Ideas,” Political Science Quarterly 105, no. 2 (Summer 1990), 201CrossRefGoogle Scholar.

41. Ways and Means Chairman Dan Rostenkowski (D-IL), cited in Conlan, Wrightson, and Beam, Taxing Choices, 94.

42. For the connections between the EITC and tax reform, see Beam, Conlan, and Wrightson, “Solving the Riddle of Tax Reform”; Birnbaum and Murray, Showdown at Gucci Gulch; Bonafede, Dom, “Democratic Party Takes Some Strides Down the Long Comeback Trail,” National Journal 15, no. 41 (10 8, 1983): 2053–5Google Scholar; Conlan, Wrightson, and Beam, Taxing Choices; Demkovitch, Linda E., “Fairness Issue Will Be Campaign Test of Reagan's Record on Budget Policies,” National Journal 16, no. 36 (09 8, 1984): 1648–53Google Scholar; Greenberg, “Plain Speaking”; Keene, Karlyn H., “Who's the Fairest of Them All?”, Public Opinion 7, no. 2 (04/05 1984): 4751Google Scholar; Pear, Robert, “Budget Study Finds Cuts Cost the Poor As the Rich Gained,” New York Times, 04 4, 1984, p. AlGoogle Scholar; “The Poor Pay More,” Washington Post, April 19, 1984, p. A20; Primus, Wendell E., “Children in Poverty: A Committee Prepares for an Informed Debate,” Journal of Policy Analysis and Management 8, no. 1 (Winter 1989): 2334CrossRefGoogle Scholar; Smith, Susan, “New GOP Leadership Readies Grassroots Organizing Effort,” Congressional Quarterly Weekly Report 41, no. 10 (03 12, 1983): 519–22Google Scholar; Steuerle, C. Eugene, “Tax Credits for Low-Income Workers with Children,” Journal of Economic Perspectives 4, no. 3 (Summer 1990): 201–12CrossRefGoogle Scholar; U.S. House of Representatives, Committee on Ways and Means, Oversight Subcommittee, Federal Tax Treatment of Low-Income Persons, April 12, 1984; U.S. Senate, Finance Committee, Tax Reform Proposals – IV (People Below Poverty Line), June 17, 1985; personal interview with Robert Greenstein, August 1990; personal interview with Wendell Primus, August 1990 and March 1991; personal interview with Gene Steuerle, February 1991; personal interview with Randy Weiss, February 1991.

43. According to Jack Mayer of the American Enterprise Institute, “the working poor are ‘an egregious example of people who have been hurt by the Administration's social policies.… I am very much in favor of the austerity Reagan advocated…but I do not think he distributed it fairly.’” As a remedy, Mayer suggested greater cuts in middle-class entitlements. Quoted in Demkovich, “Fairness Issue,” 1651.

44. Martin, Cathie J. describes a similar process in Shifting the Burden: The Struggle aver Growth and Corporate Taxation (Chicago: University of Chicago Press, 1991)Google Scholar.

45. Primus, “Children in Poverty: A Committee Prepares for an Informed Debate,” 30. Primus was the Ways and Means staff economist. Robert Greenstein, director of the Center on Budget and Policy Priorities, confirmed that it was Primus who first brought the EITC to his attention. The two had known each other since the late 1970s when Primus was a staff member of the Agriculture committee and Greenstein administered the Food Stamps pro-gram. Greenstein interview, August 1990. President Clinton later appointed Primus to be a Deputy Assistant Secretary of Human Services at the Department of Health and Human Services.

46. Other groups in this category include Bread for the World, the Children's Defense Fund, Coalition on Block Grants and Human Needs, the Lutheran Council, and the American Federation of State, County, and Municipal Workers (AFSCME).

47. See, for example, the testimony of Joseph Minarik, then an economist with the Brookings Institution, and of Robert Greenstein. U.S. House of Representatives, Committee on Ways and Means, Federal Tax Treatment of Low-Income Workers. Greenstein estimated that the real value of the EITC in 1985 would be less than one-half its original value in 1975.

48. Quoted in Smith, “New GOP Leadership,” 521. Republican efforts to change their image increased visibly after the 1982 elections. Their loss of 26 House seats was the largest midterm setback in over half a century.

49. Conlan, Wrightson, and Beam, Taxing Choices, 48.

50. Birnbaum and Murray, Showdown at Gucci Gulch; Conlan, Wrightson, and Beam, Taxing Choices. Conlan, Wrightson, and Beam (pp. 46–9) argue that Reagan did not view tax reform simply as a defensive maneuver to hold the Democrats in check. Reagan also equated tax reform with further reductions in tax rates.

51. To be fair, the Carter administration did increase payroll taxes in 1977. On the other hand, so did Reagan in 1983.

52. Mondale did try to make fairness a key theme of the 1984 presidential election. He referred to Republicans as the party “of the rich, by the rich, and for the rich” (cited in Demkovich, “Fairness Issue,” 1648), and appealed directly to Reagan Democrats on grounds of economic self-interest. Many voters found it difficult to square Mondale's commitment to fairness with his pledge to raise taxes and avid courtship of special interest groups. More-over, to many white, working-class ears, “fairness” was a code word for affirmative action and preferential treatment of minorities. By the same token, the Democratic leadership did not pay more than lip service to Reagan Democrats or independents. Mondale and the Democratic National Committee bet that increasing their support among traditional bases – organized labor, blacks, Hispanics, women, and the elderly – would be enough to win.

53. Wilson, James Q., Political Organizations (New York: Basic Books, 1973)Google Scholar, chapter 16.

54. U.S. Department of the Treasury, Tax Reform for Fairness, Simplicity, and Economic Growth (Washington, D.C.: Department of the Treasury, 1984), 71Google Scholar.

55. For a discussion of how problems, solutions and politics come together to form “policy windows,” see Kingdon, John, Agendas, Alternatives, and Public Policy (Boston: Little, Brown, 1984)Google Scholar.

56. Less efficient options included increases in the standard deduction and personal exemption, which would benefit all taxpayers regardless of need. Interview with Gene Steuerle, February 1991.

57. Steuerle, Gene, “The Integration of Tax and Transfer Systems Part 2: A Negative Earnings Tax (NET),” Tax Notes 50, no. 1 (01 7, 1991): 8990Google Scholar.

58. Interview with Gene Steuerle, February 1991.

59. “After Years of Debate, Welfare Reform Clears,” Congressional Quarterly Almanac 1988 (Washington, D.C.: Congressional Quarterly, 1988): 349–64; Congressional Record, May 22, 1985, S6861–75; U.S. House of Representatives, Committee on Ways and Means, Sub-committee on Public Assistance and Unemployment Compensation, Welfare Reform, March 13, 1987; U.S. Congress, Joint Committee on Taxation, “Federal Tax Treatment of Individuals Below the Poverty Line,” in Senate Finance Committee, Tax Reform Proposals – IV (People Below Poverty Line).

60. The act also tried to make it easier for recipients to move off AFDC and into the labor force by extending their Medicaid coverage, making permanent the Win and Win Demonstration programs, and increasing the standard deduction and personal exemption.

61. On the salience of welfare reform to working-class whites, see Edsall, Chain Reaction.

62. However, the Family Support Act of 1988 did require states to disregard the EITC when calculating AFDC eligibility and benefits.

63. Clark, Timothy B., “Raising the Floor,” National Journal 19, no. 12 (03 21, 1987): 702–05Google Scholar; Cohodas, Nadine, “Minimum Wage Getting Maximum Attention,” Congressional Quarterly Weekly Report 45, no. 10 (03 7, 1987): 403–7Google Scholar; “Minimum-Wage Impasse Finally Ended,” Congressional Quarterly Almanac 1989, vol. 45 (Washington, D.C.: Congressional Quarterly, Inc., 1990): 333–40; “Minimum Wage Increase,” Congress and the Nation, vol. 7, 1985–1988 (Washington, D.C.: Congressional Quarterly, 1990): 705–6; Morehouse, Macon, “Senate Opens Debate on Minimum-Wage Hike,” Congressional Quarterly Weekly Report 46, no. 38 (09 17, 1988), 2587Google Scholar; “Raising the Minimum Wage,” Congressional Digest no. 66, 8–9 (August-September 1987): 193–224; Rauch, Jonathan, “Paycheck Politics,” National Journal 21, no. 27 (07 8, 1989): 1746–9Google Scholar; interview with Joe Flader, legislative assistant to Representative Tom Petri, March 1991. In addition to the minimum wage, organized labor pushed for plant closing and parental leave legislation.

64. The minimum wage had equaled between 45 and 60 percent of the average hourly wage since the late 1940s. It slipped from 48 percent in 1981 to 38 percent in 1987. Clark, “Raising the Floor.”

65. Duncan, Phil, ed., Politics in America, 1990: The 101st Congress (Washington, D.C.: CQ, Inc., 1989), pp. 1643–5Google Scholar. Tom Tauke (R-IA), also a member of the Education and Labor Committee, was another advocate of expanding the EITC in lieu of the minimum wage.

66. Cited in Rauch, “Paycheck Politics,” 1747.

67. Banks, Howard, “A Better Way to Help the Low-Paid,” Forbes 141, no. 14 (06 27, 1988), p. 43Google Scholar; “Better than $3.35, $4.25, or Even $5.05,” New York Times, July 11, 1988, p. A16.

68. Dionne, E.J. Jr, “Democrats Fashion Centrist Image In New Statement of Party Policy,” New York Times, 10 21, 1986, pp. 1Google Scholar, 28; Jon F. Hale, “Party Factionalism in Congress: A Study of the Democratic Leadership Council's Membership in the House,” paper presented at the annual meeting of the American Political Science Association, Washington, D.C., August 28-September 1, 1991; Hook, Janet, “Officials Seek Moderation in Party's Image,” Congressional Quarterly Weekly Report 43, no. 10 (03 9, 1985), 457Google Scholar; Kuttner, Robert, The Life of the Party: Democratic Prospects in 1988 and Beyond (New York: Viking, 1987)Google Scholar.

69. Rauch, “Paycheck Politics,” 1746.

70. Representative MacKay, Buddy (D-FL), editorial “Raise the Minimum Wage? No, There's a More Sensible Approach,” Washington Post, 05 5, 1988, p. A23Google Scholar; Robert J. Shapiro, “Work and Poverty: A Progressive View of the Minimum Wage and the Earned Income Tax Credit,” Progressive Policy Institute, Policy Report No. 1 (June 1989). The Progressive Policy Institute is the research arm of the DLC. Ironically, a Gallup poll taken in 1987 indicated across-the-board support for an increase in the minimum wage from $3.35 to $4.65 per hour, phased in over three years. Seventy-seven percent of all respondents favored such an increase, including 66 percent of Republicans, 78 percent of independents, and 79 percent of those earning between $15,000 and $25,000 per year – some of the very groups targeted by DLC Democrats. Gallup, George Jr, The Gallup Poll: Public Opinion 1987 (Wilmington: Scholarly Resources, 1988), 125–8Google Scholar.

71. Greenstein, Robert and Shapiro, Isaac, “A Higher Minimum Wage Would Help the Poor,” Washington Post, 08 15, 1989, p. A19.Google Scholar

72. This discussion of the EITC and family policy is based on “Child-Care Bill Caught in House Spat,” Congressional Quarterly Almanac 1989, vol. 45 (Washington, D.C.: Congressional Quarterly, Inc., 1990): 203–17; “Child-Care Bill Dies Amid Partisan Sniping,” Congressional Quarterly Almanac 1988, vol. 44 (Washington, D.C.: Congressional Quarterly, Inc., 1989): 365—8; DeParle, Jason, “Poor Families Gain Under Tax Accord,” New York Times, 10 31, 1990, p. A20Google Scholar; Dionne, “Democrats Fashion Centrist Image”; Edsall, Thomas B., “Consensus Builds to Expand Aid for Working Poor,” Washington Post, 08 21, 1989, pp. A1, A10Google Scholar; Kamarck, Elaine Ciulla and Galston, William A., Putting Children First: A Progressive Family Policy for the 1990s (Washington, D.C.: Progressive Policy Institute, 1990)Google Scholar; Kosterlitz, Julie, “Family Fights,” National Journal 22, no. 22 (06 2, 1990): 1333–7;Google ScholarRovner, Julie, “Child-Care Debate Intensifies as ABC Bill is Approved,” Congressional Quarterly Weekly Report 47, no. 11 (03 18, 1989): 585–7Google Scholar; Rovner, Julie, “Congress Shifts Its Attention to the Working Poor,” Congressional Quarterly Weekly Report 47, no. 7 (02 18, 1989): 326–8;Google ScholarRovner, Julie, “Consensus Grows on Dual Path to Boosting Child-Care Aid,” Congressional Quarterly Weekly Report 47, no. 16 (04 22, 1989): 902Google Scholar; Schambra, William A., “Turf Battles: The Parties Clash over Community,” Public Opinion 11, no. 2 (07/08 1988): 17–9Google Scholar; U.S. House of Representatives, Committee on Ways and Means, Subcommittee on Human Re-sources, How to Help the Working Poor; and Problems of the Working Poor, February 28, March 21, and April 27, 1989. The written record is supplemented by personal interviews with Helen Blank, August 1990; David Ellwood, November 1990; Robert Greenstein, August 1990; Wendell Primus, March 1991; Nancy Reeder and Madlyn Morreale, February 1991; Michael Scheinfield, February 1991.

73. Prior to 1986, individual Democrats tried to reclaim the profamily label in disparate ways. One positive step was the creation of the House Select Committee on Children, Youth and Families in 1982. The Committee was the brainchild of Representative George Miller, a liberal Democrat from California, who wanted to create a forum in which Democrats could rethink family policy. Governor Mario Cuomo of New York made extensive and passionate use of family imagery in his speech at the Democratic National Convention in 1984, to little effect. Various Democrats made disparaging remarks about the administration's treatment of families in conjunction with hearings about poverty and tax reform.

74. Quoted in Dionne, “Democrats Fashion Centrist Image,” 28.

75. Many of these policies were also justified in the name of improving American competitiveness in the world economy, another site of interparty competition in the 1980s.

76. Kosterlitz, “Family Fights,” 1333. In a similar vein, the Democratic National Committee issued a strategy paper, Kids as Politics, which declared that “kids are now the dominant form of expression for the politics of '88 … Kids are an umbrella that Democrats should embrace to recreate their majority” (quoted in Schambra, “Turf Battles,” 17).

77. Cited in Kosterlitz, “Family Fights,” 1333. The day after Democrats adjourned, President Reagan made family a central theme of his final State of the Union message.

78. Gallup, George Jr, The Gallup Poll: Public Opinion 1988 (Wilmington: Scholarly Resources, 1989), 219–20Google Scholar.

79. Besides the DLC, a few liberal Democrats and the ACLU expressed reservations about any bill that extended aid to church-based childcare centers.

80. It also included smaller increases in the dependent care tax credit and made that credit refundable for the poor. The initial version of Downey's bill was twice as large. Over five years, it would cost an estimated $34 billion. Of this, approximately $25 billion would go the EITC, $7 billion to the dependent care tax credit, and almost $2 billion in funding for Title XX day-care programs. Downey suggested that eliminating the “bubble” in the income tax rates (i.e., increasing the top rate from 28 to 33 percent) would generate more than enough revenue to fund his bill.

81. Downey's proposal was also more acceptable to the National Governors Association, which had gone on record as opposed to nationwide quality standards and in favor of additional tax credits and deductions.

82. In a letter to Downey and Miller, CDF president Marian Wright Edelman “accused the two of trying to ‘sabotage groundbreaking child care legislation for petty jurisdictional and power reasons’” (cited in Kosterlitz, “Family Fights,” 1336).

83. President Clinton, a good friend of Downey's, later appointed Ellwood to be Assistant Secretary for Planning and Evaluation at the Department of Health and Human Ser-vices, and a member of the president's working group on welfare reform.

84. Downey was quoted in 1989: “Nobody's going to say, 'I don't want to get involved in being Father Congress, I'll just let [ABC sponsors Sen. Christopher J. Dodd, D-Conn., and Rep. Dale E. Kildee, D-Mich.] do that.' There's a certain amount of natural competitiveness that exists in any event around here” (Kosterlitz, “Society's Child Care,” 1108).

85. Reconciliation bills are voted up or down as a package, with no opportunity for amendment. Thus, “copious and relatively veto-proof reconciliation bills often have been the vehicles of social legislation in recent years”; “All-Purpose Increase for the Poor,” Washington Post, July 5, 1989, p. A16. In this episode, Senate conferees objected to attempts by House conferees to purge the bill of numerous special interest measures inserted by the Senate Finance Committee. Senate conferees demanded that the House give up both child-care proposals in exchange for a “cleaner” bill.

86. Proponents of the EITC suspect that Bentsen was motivated less by good policy concerns than a desire to establish a positive record on family issues in the event he ran for president in 1992 or 1996. They also suspect that his staff leaked evidence of problems in the EITC program to a reporter at the Washington Post to erode support for the EITC.

87. Quoted in DeParle, “Poor Families Gain Under Tax Accord,” p. A20. The staff member was referring as well to increases in Medicaid passed as part of the same budget package.

88. Concerning the political vulnerability of targeted programs see Theda Skocpol, “Targeting Within Universalism: Politically Viable Policies to Combat Poverty in the United States” in Jencks, Christopher and Peterson, Paul E., eds., The Urban Underclass (Washington, D.C.: Brookings Institution, 1991), 411–36Google Scholar, as well as the reply by Robert Greenstein in “Universal and Targeted Approaches to Relieving Poverty: An Alternative View,” pp. 437–59 of the same volume.

89. Skocpol, Theda, Protecting Soldiers and Mothers: The Political Origins of Social Policy in the United States (Cambridge: The Belknap Press of Harvard University Press, 1992), 117Google Scholar. Skocpol acknowledges the influence of societal actors like pension attorneys on the Arrears Act, but maintains that their participation was not decisive.

90. Derthick, Martha, Policymaking for Social Security (Washington, D.C.: Brookings Institution, 1979)Google Scholar, chapter 17; Gilmour, Strategies of Disagreement, chapter 2.

91. To see two widely different interpretations of U.S. social policy that nevertheless agree on the weakness of political parties, see Weir, Margaret, Orloff, Ann Shola, and Skocpol, Theda, “Understanding American Social Politics,” in idem., eds., The Politics of Social Policy in the United States (Princeton: Princeton University press, 1988), 327; and Piven and Cloward, Regulating the Poor, chapter 12Google Scholar.