The triumph of George W. Bush in the 2000 presidential election is further evidence of the waning viability of the American welfare state. Since 1980 various strains of conservatism have vied for control of domestic policy through the Republican party, the most recent variant being ‘compassionate conservatism’. Democrats have responded by disavowing their liberal heritage and moving toward the centre. This reflects the replacement of a ‘social model’ with an ‘economic model’ for social policy. The Left can be rejuvenated by adopting three themes for domestic policy: mobility, empowerment and restructuring. These are consistent with the ‘third way’ in social policy, as centrists have advocated in the United States and the United Kingdom.