For decades conservative welfare states have reformed reluctantly. To understand recent family policy reforms in Germany we must add institutions and economics to any account of politics. This article focuses on the grand coalition of CDU/CSU and SPD formed after the 2005 Bundestag election. Two opposed assumptions pertain to grand coalitions: one holds that a coalition of parties with different ideologies will act according to the lowest common denominator resulting in policy inertia. The opposite holds that grand coalitions enable policy change because constraints are removed by the supermajority. This article develops five conditions for successful reform, arguing that traditional family policies directed at the protection of motherhood are shifting towards reconciliation policies that emphasize labor market activation and increased birth rates. The shift indicates 1) that even conservative states have the potential for bounded reform; and, 2) that agency—particularly partisan and coalitional interests—needs to be considered more seriously.