Social welfare policy in the United States must be fundamentally reformed and modernized. Economic, demographic, and social conditions have changed, but our social policies have not adapted to these changes.

This report considers the social welfare system as a whole. It is fundamentally different from the reports that deal with individual topics like education, welfare, nutrition, or health care. They are separate reviews of the fragmented pieces of our social welfare system; this is an effort to transcend its splintered segments.

Our basic premise is that we must stop pitting one group against another in the struggle to improve social policy. We believe that if an unmet need is effectively addressed, we all benefit, not just those who have that need at that particular time. Similarly, if that need is neglected and problems fester, we all pay, and we usually pay more by delaying. It is essential that we improve economic opportunities and strengthen social protections for our most vulnerable citizens. These themes are not antithetical but complementary, and they cut across all age groups.

Today's international economy challenges our capacity to produce, as more working-age Americans are affected by economic decisions that are made abroad. Changing family structures and growing areas of concentrated disadvantage challenge us to invest in all our nation's children. An aging population signals a need for us to rethink relationships between generations, and to confront the widening gap between the affluent and the impoverished elderly.

These new developments threaten to overwhelm a social welfare system that was created in the 1930s under very different social and economic circumstances. This system underwent steady, if incremental, expansion through the 1960s and 1970s, followed by retrenchment in the 1980s. Recently, social welfare policy has not kept up with a changing world. Many people now find themselves faced with personal crises they are wholly unprepared to resolve on their own, and for which government offers little help.

More than 30 million Americans live in poverty. About one-quarter of young Americans fail to finish high school. Children who are at greatest risk of failure in school are now the fastest growing segment of the school population and of the