America’s Next Social Contract:
Lessons from the Past, Prospects for the Future
JACOB S. HACKER AND ANN O’LEARY
The history of American risk-sharing is not a simple linear tale. From the 1930s through the 1970s, public and private protections did indeed expand more or less continuously, gradually shielding more and more Americans from the direst consequences of what President Franklin Roosevelt famously called the “hazards and vicissitudes” of economic life.1 As this volume has documented, however, the last generation has witnessed a very different trajectory. Instead of shifting upward toward public and private systems of insurance, economic risk has shifted downward from government and employers onto individual American workers and their families. This transformation has occurred across a range of policy areas and aspects of Americans’ economic lives, from health care to pensions to job security to personal finances to family strategies for balancing work and caregiving.
And yet, even amid this Great Risk Shift, not all developments have lessened the government’s role as risk manager. For instance, a major expansion of Medicaid health coverage for the poor and the Earned Income Tax Credit have provided substantial help for workers most disadvantaged by rising economic inequality and insecurity. And in the last two years, as this volume has documented, largescale steps have been taken to try to push back against inequality and insecurity, including the upgrading of unemployment insurance in the economic rescue package of 2009, increased consumer protections enacted as part of the financial reform bill, the expansion of direct student lending in the health care reform bill, and of course the health reform bill itself.
The back-and-forth movement of economic risk—over time and across policy areas—should remind us that there is nothing inevitable about either broader social insurance or greater individual risk. Instead, these are political choices. They are political not just because they are shaped by national and state policies, but more fundamentally because they reflect the relative power and competing ideas of actors struggling to define and redefine the role of government, employers, families, and individuals in a new century.