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Heightened poverty and inequality have redirected scholarly attention to the Democratic Party and their failure to develop a policy agenda fostering economic security in the post-industrial period. This paper adds to this debate by examining how liberal Democrats responded to the dual jobs-welfare crisis of the post-industrial period at the state level, focusing upon two innovative liberal states, Wisconsin and California. Existing literature has examined other factions of the Democratic Party, such as Southern Democrats and New Democrats, and this paper fills an important gap by studying the opportunities, ideas, and strategies of liberal Democrats during a crucial period of welfare state change between the 1970s and the 1990s. This paper argues that liberal Democrats pursued protective restructuring (Levy 1999) in response to the jobs-welfare crisis, and these restructuring projects shaped both state-level and national welfare politics, making liberal Democrats important actors in the transformation of the U.S. welfare state. This paper examines the limitations of these projects, the effects of liberal Democrats' efforts to advance their projects, and the dynamics of the Democratic Party that both advanced and undermined liberal restructuring projects.