During an era of welfare retrenchment in the United States, the Earned Income Tax Credit (EITC) and Lifeline Universal Telephone Service evolved from residual means-tested programs to significant social policies. The cases demonstrate the opportunity points for social policy innovation that exist in the political climate of economic liberalisation. The essay describes patterns that do not simply prevent retrenchment but hint at politically advantageous policy designs that permit social policy expansion in the US welfare state context. I label this policy-making strategy stealth welfare. Moreover, by considering programs like Lifeline service the article draws attention to the evolving nature of social policy in advanced industrial economies.