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In its first year, the Biden Administration has embarked on an aggressive domestic agenda intended to offer a variety of economic support to lower and middle class Americans. The American Rescue Plan, passed in March, included direct payments to U.S. households, new investments into safety net programs like food stamps and unemployment, and increases to the Earned Income Tax Credit and Child Tax Credit. The Biden Administration followed this just a few weeks later with two proposals, the American Jobs Plan and American Families Plan, which would dramatically scale up federal spending on a variety of programs for infrastructure, job creation, education, child care, health, food assistance, and tax relief. Biden’s agenda has prioritized a strong role for the federal government in offering financial support to needy Americans and creating pathways to the middle class.
This agenda would represent a new chapter for the U.S. welfare state, building beyond the New Deal programs introduced in the 1930s and the Great Society programs enacted in the 1960s. These earlier programs created a wide-ranging role for the government in protecting disadvantaged citizens from economic harms. Today, public welfare encompasses a variety of government programs whose benefits are contingent on need, such as Medicaid, Temporary Assistance for Needy Families (TANF), and Supplemental Security Income (SSI).
Because these programs are typically based on demographic and economic factors, they have grown with shifts in the population and economy over time. According to the Census Bureau, in the last 20 years alone, state and local welfare spending has more than tripled in nominal dollars, rising from $233 billion nationally in 2000 to $743 billion in 2019. As a share of total spending, welfare spending has risen from 13.4% of state and local budgets at the start of the millennium to 18.8% in 2019. But even on a per capita basis, spending is up nearly 180% over that span.