The development of supranational (European) social rights, and therefore social citizenship, is undermined by strong, direct relationships between citizens and national welfare states. Social policies contribute to national identities because they entail direct relationships between states and citizens. In well-developed European welfare states strong relationships between citizens and their member-states are expected. This may prevent the development of a similar relationship at the European level. The U.S. provides a comparison case, wherein a successful transference of citizenship identity from a lower to higher level has occurred, partly as a result of the building of national-level social citizenship, at least for certain classes of people. Revolutionary War Pensions provide an example of how social policy influences national identity. The lack of EU-level social policy precludes the possibility of this type of identity formation. Finally, the interplay of social citizenship and democracy in both cases is explored. T.H. Marshall’s work regarding citizenship as the basis for democracy is used to understand how the inability to create a common social policy in the EU is harmful to democracy.