How has the U.S. safety net changed since 1970, and what have been the results? This paper examines the evolution and effectiveness of the safety net over the past half-century. It finds that while some programs have contracted, the safety net has overall grown substantially stronger through expansions that have significantly reduced poverty, increased health care coverage, and improved children’s well-being. The paper also addresses criticisms of the safety net from both the left and the right and concludes with recommendations for future policy.
Changes in the safety net since 1970
Among those who have benefited most from the safety net expansions of the past half-century are lower-income working families with children, including millions of families modestly above the poverty line that struggle to get by on low wages. At the same time, the safety net has stagnated or contracted for some other individuals and households, especially deeply poor individuals who have little or no earnings, are not raising children at home, and are not elderly, disabled, or incapacitated.
In 1970, the safety net—apart from Social Security, Medicare, and Unemployment Insurance (UI)—was relatively spartan in scope and impact.
The Food Stamp Program (now called the Supplemental Nutrition Assistance Program [SNAP]) was not available in all parts of the country in 1970, and households had to use their own cash to purchase their food stamps, which prevented many eligible households from enrolling. Since then, the purchase requirement has been eliminated, benefits have increased, and participation has grown substantially. SNAP has also served as an automatic stabilizer, expanding during economic downturns as more people become eligible and receding as the economy recovers.
In 1970, Medicaid’s reach was severely limited as well. The program primarily served those who received cash welfare assistance while excluding most of the working poor and large numbers of low-income children. The Children’s Health Insurance Program (CHIP) did not yet exist. Nor did the Affordable Care Act (ACA) subsidies to help people afford private health insurance. And Medicare lacked prescription drug coverage.
Various other major social programs also were created after 1970, including the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), Supplemental Security Income (SSI), the Women, Infants, and Children program (WIC), and the Low Income Home Energy Assistance Program (LIHEAP).
Over the same time period, policymakers also cut some programs markedly, though in aggregate, the expansions substantially outweighed the cuts. UI coverage declined. From 1993 to 2016, real spending for cash welfare assistance through Aid to Families with Dependent Children (AFDC) and its successor, Temporary Assistance for Needy Families (TANF), fell by a stunning 78 percent—reducing support for some of the lowest-income families with children. Many states cut their General Assistance (GA) programs, which target very poor individuals who aren’t elderly, disabled, or raising children.
The effectiveness of the safety net
Poverty rates have fallen over the past 50 years, and the data demonstrate that the primary reason is that social programs overall have grown considerably stronger. The safety net now cuts poverty nearly in half, a dramatic improvement over its anti-poverty impact half a century ago.
The poverty rate before counting government benefits and taxes stood at 23.6 percent in 2019 and 23.4 percent in 2023, only modestly lower than in 1970. But the poverty rate after counting government benefits and taxes was 13.5 percent in 2019 and 12.9 percent in 2023 (the most recent year for which we have poverty data), far lower than in 1970.
The data for child poverty also are striking. Government benefits and taxes increased the child poverty rate in 1970 because income and payroll taxes pushed more children’s families into poverty than the safety net raised out of poverty. But in 2023, government benefits and taxes reduced the child poverty rate by more than a third.
The number and share of Americans who lack health insurance fell sharply as well, especially after implementation of the ACA. Nearly 15 percent of Americans were uninsured in 1970. By 2023, only 7.9 percent were uninsured, marking the lowest U.S. uninsurance rate ever recorded. And the share of children without insurance has fallen from about 25 percent several decades ago to about 5 percent today.
Addressing critiques of the safety net
The federal minimum wage has eroded over recent decades, and the share of workers in labor unions has plunged, leading some on the left to call for focusing almost entirely on predistributive measures, such as minimum wage increases and labor law reforms, while largely eschewing further improvements in redistributive social programs. This paper challenges that perspective, arguing for the critical role safety net programs play in reducing poverty, shrinking the ranks of the uninsured, and improving children’s well-being both now and over the long term. The paper also cites evidence that predistributive and redistributive measures work most effectively in tandem and calls for improvements in both areas. The paper also explains that predistributive measures cannot pass the U.S. Senate unless they secure a supermajority of 60 votes, which makes them much harder to enact than redistributive measures, which need only 51 votes if they are included in a budget reconciliation bill.
The paper also addresses two leading critiques of the safety net from the right: that targeted safety net programs are the primary driver of increased deficits and debt and that they lack sufficiently tough work requirements.
The paper highlights evidence showing that tax cuts account for considerably more of the fiscal imbalance that has emerged since the turn of the century than policymakers’ actions to strengthen targeted social programs to reduce poverty, aid working families with modest incomes, and shrink the ranks of the uninsured.
The paper also reviews recent research on work requirements, which does not support calls to make such requirements more widespread and severe. The research finds that work requirements in Medicaid and SNAP have proven largely ineffective in inducing more work while resulting in a substantial loss of benefits, including among people who are already working or qualify for an exemption but have difficulty with the paperwork needed to prove compliance and people who are unable to work or to find employment that provides sufficient hours of work on a regular basis.
Recommendations
The paper concludes with recommendations—first that policymakers “do no harm.” Major cuts to various social programs, currently being considered by Congress, would almost certainly increase poverty and leave many more Americans without health insurance. Nor are cuts like these necessary to bolster the nation’s fiscal health.
The paper also recommends that policymakers prioritize addressing a number of major safety net gaps, such as the inadequacies of UI, the CTC’s limited availability to the lowest-income children, the shortage of affordable housing and child care, and the threadbare safety net for individuals living in poverty who aren’t raising children at home and aren’t classified as elderly or disabled.
